Mortgage - Existing Dept

kingstreet

TBH I don't know the answer to this.

Do lenders see an ongoing debit balance as superior to a balance returned to nil on a monthly basis?

No idea. They don't make many of the processes which go into credit score publicly available.

This would also cause one to question the difference between different forms of credit. Is a fixed monthly loan payment viewed differently to a credit card payment?

I'm not sure we'll ever know...

ValHaller

kingstreet wrote: »

Do lenders see an ongoing debit balance as superior to a balance returned to nil on a monthly basis?

No idea. They don't make many of the processes which go into credit score publicly available.

Logically, I think it will be different for different types of lender.

Credit card lenders will see those who retain a balance as potentially more profitable. Mortgage lenders may prefer to see balances cleared each month as a sign of a credit averse attitude which will see the mortggae debt put high in the borrower's priorities.

jacobsnannie

Can anyone help?? my husband is severely disabled and I am his full-time carer. We currently live in a 5 bed detached property for which we have the interest paid direct to our lender by the DWP. We really need to move to a bungalow because my husband is struggling to get around the house. Does anyone know if we would be able to sell our current house and buy another (cheaper) house i.e. bungalow without it affecting the ESA payments made by the DWP.

Thanks

Thrugelmir

Crashandburn wrote: »

My question was 'what looks better to lenders'.

From the large lenders point of view. The starting point is looking top down. Across the whole mortgage book not one single mortgage.

So using algorithms on the data sets as supplied by the credit agencies. Lenders are able to attribute their scoring system to a multitude of individuals factors. Even down to background of borrower.

Depending upon the executive boards direction. The algorithms can be loosened or tightened to attract or decline business. Set the bar for individual products.

Ultimate aim is to maintain the overall lending book at given targets.

Times have moved on since all was done manually.

ValHaller

jacobsnannie wrote: »

Can anyone help?? my husband is severely disabled and I am his full-time carer. We currently live in a 5 bed detached property for which we have the interest paid direct to our lender by the DWP. We really need to move to a bungalow because my husband is struggling to get around the house. Does anyone know if we would be able to sell our current house and buy another (cheaper) house i.e. bungalow without it affecting the ESA payments made by the DWP.

Thanks

Start a new thread please. It does not help either the Original Poster or yourself to have 2 conversations going on the same thread.

ETA: Posted on another forum as a new thread https://forums.moneysavingexpert.com/discussion/4457445

Crashandburn

Thrugelmir wrote: »

From the large lenders point of view. The starting point is looking top down. Across the whole mortgage book not one single mortgage.

So using algorithms on the data sets as supplied by the credit agencies. Lenders are able to attribute their scoring system to a multitude of individuals factors. Even down to background of borrower.

Depending upon the executive boards direction. The algorithms can be loosened or tightened to attract or decline business. Set the bar for individual products.

Ultimate aim is to maintain the overall lending book at given targets.

Times have moved on since all was done manually.

Point......................................missed.

But thanks for the reply

My questioning is about boosting your own credit score/profile not how lenders profile their lending books

ValHaller

Crashandburn wrote: »

Point......................................missed.

But thanks for the reply

My questioning is about boosting your own credit score/profile not how lenders profile their lending books

Surely this is just the flip side of the same coin??? Thrug is telling us that there are no universal criteria and even hinting that the algorithmic criteria as well as the bar can be changed for individual products.

So there is no unique solution to the problem of boosting your credit profile - it all depends on the product. Which in turn is a healthy kick in the teeth for the Experian so-called 'credit score'

Crashandburn

I'd see the algorithmic criteria as a secondary use of the original data. I'm asking how can the original data be improved.

Thrugelmir

ValHaller wrote: »

Which in turn is a healthy kick in the teeth for the Experian so-called 'credit score'

Meaningless from a lenders point of view. As each lender can apply their own criteria. To match risk against price (interest rate and LTV).

Though in principle a useful tool for those that struggle to manage their personal financial affairs properly.

ValHaller

Crashandburn wrote: »

I'd see the algorithmic criteria as a secondary use of the original data. I'm asking how can the original data be improved.

I think that the debate about whether it is better to pay off a credit card in full each month or keep a balance on it demonstrates that there is no universal solution to the question of what is the best data. Valid solutions only exist for individual products according to their scoring algorithms.

With mortgage products, I would be fairly sure that in general a credit card cleared in full would be taken as better than keeping a balance. At least with any lender I would want to borrow from. But this would probably not apply to unsecured lenders.

But who knows? Perhaps the old Northern Rock would have preferred customers with credit card balances, because they would represent better prospects for more lending?