How would you define 'high credit score'?

gazter

I've been reading around, trying to get an understanding of credit scores etc for a mortgage application.

I made an earlier post about what i am hoping to borrow.

I have poured over my experian, equifax and noddle credit reports. I did have two late payments on one card, these have been cleared in the past few days by the credit card company and no longer show up on experian.

Other than that everything is good. I know people on here say that the actual scores are bunkum, mine was 999.

I have been on the electoral role at the same address for nine years, have an existing mortgage, which is over paid, have no credit card debt, i dip in and out of an authorised overdraft every now and then, however this doesnt show on the experian report.

I have a series of settled higher purchase agreements, i have no warnings of any kind on any of the things on my file.

What reasons could be given for not being 'high credit'?

Annisele

999 is indeed bunkum. It just means you're paying the amounts your lenders expect you to pay.

So, if you've got an income of £20k per year, unsecured debts of £20k, and no savings, you could still have a credit score of 999. If you tried to borrow £300k on those facts, you'd get laughed at.

On the other hand, you could have an income of £200k per year, the odd late payment on a credit card you usually pay off in full every month but sometimes forget, and savings of £500k. You'd then have a score below 999 - but if you wanted to borrow £300k to help you buy a £600k property, I'd expect it to be fairly easy (subject to a few things like your age and the condition of the property).

Goldiegirl

I'm a relative newcomer to MSE, and I've been quite suprised about the seeming obsession with credit score.

Use it as a guideline by all means, but the only credit score you need is the one that your prospective lender uses as part of their underwriting process.

Old_Git

if you have a debt collector coming after you for non payment of a £3700 credit card bill ,would that stuff your credit score and your ability to get more credit.

gazter

Goldiegirl wrote: »

I'm a relative newcomer to MSE, and I've been quite suprised about the seeming obsession with credit score.

Use it as a guideline by all means, but the only credit score you need is the one that your prospective lender uses as part of their underwriting process.

It was more to do with reading though the Woolwich mortgage lending criteria. The multiples are much better when the applicants have a 'high credit score'.

I wonder how that score would be defined.

kinh

Someone told me that in order to get a mortgage you need to have a experian credit score of 600 or more is it true? Considering lenders use their own scoring methods and don't know your experian score..

Thrugelmir

gazter wrote: »

I wonder how that score would be defined.

Every lender can score you as they wish depending on the product applied for. For instance every month you use your overdraft facility could score against you. As from a lenders point of view. This suggests that you don't manage your money very well , and should you encounter financial distress. You may well struggle and be on the slippery downward slope.

What you need to appreciate is that there is finite amount of mortgage money available to lend. So a lender can raise the bar higher and higher to filter out applications. In a sense you are in competition with somebody else to obtain that money.

The cleaner, the better your credit profile. Along with other personal factors the better the chance of obtaining the mortgage.

Most people overate their own affordability. A mortgage is 25 year loan, 300 installments. Much can change in that timeframe. Whereas people tend to base their viewpoint on today.