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    • breakingbad
    • By breakingbad 16th Mar 17, 4:44 PM
    • 95Posts
    • 62Thanks
    breakingbad
    MSE Credit Club - affordability score?
    • #1
    • 16th Mar 17, 4:44 PM
    MSE Credit Club - affordability score? 16th Mar 17 at 4:44 PM
    Hi all,

    I get the monthly MSE credit club emails and always log in to check my report.

    For the last few months (possibly longer), it has been telling me my credit score is brilliant (999 this month, apparently) but that my affordability score is "very weak".

    I just don't understand the affordability score. When I click on analyse affordability, it tells me that Debt Ratio and Credit Utilisation are both "Very good", but that Disposable Income is "Very Weak".

    Apart from being wrong (I have about £1200 disposable income every month), I'm wondering how it has calculated this? My salary is correct, and I have added my wife's salary also.

    What am I doing wrong, or is there an error?

    Many thanks!

    G
Page 1
    • Ben8282
    • By Ben8282 17th Mar 17, 12:51 AM
    • 1,989 Posts
    • 863 Thanks
    Ben8282
    • #2
    • 17th Mar 17, 12:51 AM
    • #2
    • 17th Mar 17, 12:51 AM
    Well as MSE credit club don't lend money and don't make lending decisions of providers of credit, just ignore it.
    Perhaps you should recheck any figures you have entered.
    • nic_c
    • By nic_c 17th Mar 17, 8:06 AM
    • 843 Posts
    • 519 Thanks
    nic_c
    • #3
    • 17th Mar 17, 8:06 AM
    • #3
    • 17th Mar 17, 8:06 AM
    I just don't understand the affordability score. When I click on analyse affordability, it tells me that Debt Ratio and Credit Utilisation are both "Very good", but that Disposable Income is "Very Weak".

    Apart from being wrong (I have about £1200 disposable income every month), I'm wondering how it has calculated this? My salary is correct, and I have added my wife's salary also.
    Originally posted by breakingbad
    It's based on the two income boxes and doesn't matter how high your DI is. You could have a household income of 80K but very low DI due to 5 kids, TV packages, items on HP, etc, but it wouldn't say "v weak" or "weak"
    • MSE Dan L
    • By MSE Dan L 17th Mar 17, 12:48 PM
    • 604 Posts
    • 369 Thanks
    MSE Dan L
    • #4
    • 17th Mar 17, 12:48 PM
    • #4
    • 17th Mar 17, 12:48 PM
    Hi there

    The disposable income figure takes into account data you've provided to us (e.g. salary, dependents, mortgage), plus items from your credit dile. This’ll include your loan and credit card balances (even if you pay off in full each month), plus any other debts showing. To check these details, just go to the Credit Report tab within your account.

    The aim here is to mimic the decisions which lenders will take, so looks at data from the Office of National Statistics, so cutting your real expenditure won't make a difference here.

    It is possible to have low affordability scores, even if your Experian Credit Score is high and you’re showing as a good chance of being accepted for products. Remember, your Experian Credit Score, just looks at your Credit History, it doesn’t take into account your earnings or expenditure, so is only part of the story.

    This is why we created the Credit Hit Rate, so you get to see the full picture. If you’re seeing high scores, but yet your affordability is low, it indicates that lenders would still likely offer your products, but you may get a worse rate or lower credit limit.

    I hope this helps.
    • David555
    • By David555 22nd Mar 17, 9:36 AM
    • 35 Posts
    • 31 Thanks
    David555
    • #5
    • 22nd Mar 17, 9:36 AM
    • #5
    • 22nd Mar 17, 9:36 AM
    Interesting stuff, I was wondering why my affordability score was very weak. Seems a bit unfair as for me it's far from the truth.

    I have around £800 left over every month after all my expenses and earn around £20,000 before tax. My only debt is around £1450 I've just put on credit card this month to top up my savings to purchase my first investment property. This will be paid off in around 6 weeks, I'm hoping to get it back in full if possible by selling a few items.


    Suppose the good thing is my bank could see first hand I handle my money well hence I got a normal credit card with a starting limit of £1800 where as all the comparison sites show 10% or less for the normal credit cards. I did apply for a bad credit builder card which showed as 100% accepted (£250 limit given by Aqua) in December and stuck around £25 on it per month which I've had no problems repaying in full every month.

    How much should one be earning to get a better hit rate score if £800 spare income a month which goes to savings isn't enough? While 20,000 a year isn't amazing compared to other people I get by perfectly fine. once that's paid off and the balance is £0 will my affordability rocket to good/very good?

    I don't drive so no expenses there, no kids, walk everywhere mostly so no transport costs, maybe £8 a month max on trains over the year. don't bother with any insurances, phone contracts, Sky tv etc, I don't need the latest clothes, food wise I rarely eat out and tend to buy the cheaper food which is why I'm able to save as much as I do. So having a very weak affordability is a tad insulting lol. I'd of guessed it was because I had a lack of credit history but seems not the case.
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