MSE News: Mortgages could become harder to get

jamesd

Nelly1977 wrote: »

now all my debts are paid off and settled and have been for some 3 years plus but the so called credit scoring system gives me a poor score because I don't have credit ! Honestly ! So now I've been told to get a credit card to get a better credit score.

Lenders want to see evidence that people are able to pay credit reliably over time, particularly for long term borrowing like a mortgage. So that does mean that those with no credit record are at a disadvantage. Worse still for those with no positive record and the odd negative for a bill payment that does show up.

Part of the difficulty is that there is no "perfect financial planning and management" score to use, so all they can see is credit use, not savings or investment use.

Daelim

Paul_Herring wrote: »

I believe that something that happened 'last year' has more weighting than something that happened '6 years ago.'

And, yes, it's fair to discriminate differently between someone who didn't manage their finances and someone who did. Could you provide a (reasonable) example of where those two people shouldn't be treated differently? (Your education example below won't be it.)



Rubbish. 'Financial education' in schools didn't happen in the 70's, 80's or 90's. People educated during those decades are perfectly capable of managing their finances (along, granted, with lots who aren't. Education won't solve that.)

I'm almost positive people who grew up in the 70's-90's were not bombarded with offers for loans, credit cards and given mortgages at income multiples way above what they could afford.

When I was a student I had a leaflet almost every day offering me a credit card... they even sent me a credit card once that I never even applied for. They gave me a limit of 3,500 pounds as a student.

Sorry, whilst people do need to take responsibility for personal finance, it's an area of life which is best learned through experience and teaching. Lack of education coupled with irresponsible lending led to the problems we face today. And if you were tempted to take a credit card or mortgage you couldn't afford, YOU and YOU ONLY get shafted for 6+ years whilst the banks carry on as normal.

Pathetic.

Paul_Herring

Daelim wrote: »

I'm almost positive people who grew up in the 70's-90's were not bombarded with offers for loans, credit cards and given mortgages at income multiples way above what they could afford.

Having grown up then myself, I'm not.

Daelim

Paul_Herring wrote: »

Having grown up then myself, I'm not.

Asking my father and mother a few minutes ago and they agree with me... the early to mid 00's were the worst time ever for irresponsible lending.

I'm not saying we don't have to take personal responsibility. I'm saying two things;

1. If we are to be held account for 6 years and more because of a bad decision to borrow money we couldn't afford to pay back, so should the banks for lending money the lendee couldn't afford to pay back. It should work both ways.

2. In order to be personally responsible for something we need to be educated on the way it works, why it works that way and the best route to take when it comes to personal finance.

Surely that's not something you can disagree with?

Thrugelmir

Nelly1977 wrote: »

But this is not taken into account but the loan for peanuts which in missed a payment for while I was unemployed so I could pay my rent instead was .

So what happens when you are unable to meet your mortgage repayment one month?

Managing personal finance includes having money put aside as savings for those difficult moments.

Over 25 years of a mortgage term you are odds on to encounter a few.