Credit Ratings

[spen666]

Recently, I came into a small amount of money after death of my ex wife. This enabled me to pay off the last small amount of my mortgage & have a small amount of savings.

I have no debts whatsoever and spend less than I earn each money now I have no mortgage to pay.

Despite this, with all credit reference agencies my credit score / ratings have fallen!

Goes to show the farce of credit scores. They were far more likely to lend me money when I was skint than now when I am solvent

 

[Ianonabike]

My wife and I got credit cards at our current bank at the same time. She earns more, yet they immediately gave me a higher limit.

 

[BoldonLad]

Recently, I came into a small amount of money after death of my ex wife. This enabled me to pay off the last small amount of my mortgage & have a small amount of savings.

I have no debts whatsoever and spend less than I earn each money now I have no mortgage to pay.

Despite this, with all credit reference agencies my credit score / ratings have fallen!

Goes to show the farce of credit scores. They were far more likely to lend me money when I was skint than now when I am solvent

Martin Lewis has been bleating on about credit scores changing, because they are changing how the calculate/guess them.

 

[CXRAndy]

I have no debts whatsoever and spend less than I earn each money now I have no mortgage to pay.

That is your issue. You need to buy things on credit.

Finance companies prefer people in debt, especially those who can service a debt monthly.

We haven't had loans for a long time. We decided to buy goods on 0% credit deals for 1-5 years to build up this imaginary credit rating. We even bought our daughters car on PCP, we didn't need to, but it all helps, interest was super low with no penalty to paying off early

 

[AndyRM]

I have no debts whatsoever and spend less than I earn each money now I have no mortgage to pay.

That is your issue. You need to buy things on credit.

Finance companies prefer people in debt, especially those who can service a debt monthly.

We haven't had loans for a long time. We decided to buy goods on 0% credit deals for 1-5 years to build up this imaginary credit rating. We even bought our daughters car on PCP, we didn't need to, but it all helps, interest was super low with no penalty to paying off early

Hell hasn't quite frozen over, but it's close enough and I agree with you.

When I was struggling to get approved for a mortgage I was advised to get a credit card to prove I was capable of servicing a debt.

It's a totally warped system.

 

[AuroraSaab]

If you have little debt eg small/no mortgage, no loans etc you will often have a low credit rating. It's because you have no evidence of your ability to pay back regularly and thus be a safe bet for lenders. Having no credit history goes against you whereas someone with loans and mortgages who has always paid them on time is a lower risk.

We kept our small mortgage going because we thought we might want to get a bigger one at some point and you're a more favourable prospect if you have some debt already. The 2 Andys posted the same as I was typing.

It also used to go against you if you had lots of credit searches from lenders but I think there's so much credit on offer now from online retailers they don't all show to other lenders.

 

[AndyRM]

If you have little debt eg small/no mortgage, no loans etc you will often have a low credit rating. It's because you have no evidence of your ability to pay back regularly and thus be a safe bet for lenders. Having no credit history goes against you whereas someone with loans and mortgages who has always paid them on time is a lower risk.

We kept our small mortgage going because we thought we might want to get a bigger one at some point and you're a more favourable prospect if you have some debt already. The 2 Andys posted the same as I was typing.

It also used to go against you if you had lots of credit searches from lenders but I think there's so much credit on offer now from online retailers they don't all show to other lenders.

Yeah, the credit availability from lenders like Klarna is bonkers. Totally unsustainable and unhelpful for folk who think that getting something on the never never is going to work out well.

 

[Pblakeney]

Not sure if the system has changed but I boosted my score by buying everything on a credit card and paying it off every month.
The other way was a big ticket item on 0% making sure it was paid off before any charges/penalties.

 

[CXRAndy]

My Dad, told me when I was 18, renting is wasteful, get a straightforward repayment mortgage as soon as possible. I did at 20.

In hindsight this was sage like advice, as endowment mortgages were all the flavour. Many ended up short and had to top up their payments as the endowment failed to produce the returns

His other parting tip, a little debt is good to keep you responsible in life.

 

[AuroraSaab]

Same here. Got a mortgage as soon as we could. We briefly had an endowment mortgage and then got them to put us back in the position we would have been if it had been repayment because it was missold. In retrospect the claims the agents made about endowment mortgages were ridiculous.

 

[Bazzer]

Not sure if the system has changed but I boosted my score by buying everything on a credit card and paying it off every month.
The other way was a big ticket item on 0% making sure it was paid off before any charges/penalties.

That works except for Capital One.*
A while back they closed the accounts of people like me, who paid their accounts in full every month. Which was annoying because we had a good cash back deal with the company.
*It should though work in the short term, to boost your score.

 

[Pblakeney]

That works except for Capital One.*
A while back they closed the accounts of people like me, who paid their accounts in full every month. Which was annoying because we had a good cash back deal with the company.
*It should though work in the short term, to boost your score.

Lesson learned, don't use Capital One.