What score to expect?

Pancakesss

Hi there,

I'm hoping you can help. I am (desperately) wanting to get onto buying my first property asap. However I have been held back from getting an AIP with HSBC due my 'bad' credit history. My credit score on Experian one month ago was 824 (poor).. My credit utilisation was at 82%

However in May this year I paid off all of the £11k debt in a lump sum gifted to me from my parents (for which I am forever grateful). I checked my credit report again this week and it seems that one of the credit cards (£4k) has updated on the file as '0' balance . My credit score then jumped up 56 points to 880 (1 point away from good), credit utilisation now at 72%. I then tried again with the bank and got rejected again for an AIP.

My question is, does anybody know what I should expect my credit score to be after my other 2 credit cards update on their now '0' balances (from £7k) hopefully this month? Credit utilisation will be 0%. I have also closed 2 of the cards and decreased the remaining card limit to £2k (from £8k).
Would it jump up by, say, at least 80 points, to bring me back into the 'good' rating area?
Any advise or comments will be very much appreciated whilst I desperately wait for my credit file to update again at the end of this month!!

Many thanks in advance.

Tixy

Welcome to the forum

Don't worry about the credit reference agencies scores.

Nobody ever sees these except you.

Potential lenders assess the data on your file, not these scores/ratings.

If you haven't already I would suggest you also get copies of your credit files from the other 2 agencies - again don't pay for the subscription/scores you just need the statutory £2 report from equifax and for callcredit you can get your report free from noddle or £2 from callcredit.

If you have negative items on your credit file (defaults/missed payments etc) then you may be better to approach an independant mortgage broker with copies of your credit files rather than making a lot of applications to one potential lender.

nidO

Your credit score could wind up being anything, because it's a made up number that only has the vaguest possible correlation to your credit history and the likelyhood of you being accepted for a mortgage, because lenders don't know (or care) what score Experian give you, and Experian don't know the specific lending criteria your chosen lender has.

More relevant questions to guessing whether you'll be mortgageable are:

Do you have any defaults/CCJ's/late payment markers etc, if so what/how many/how old?
Have you been bankrupt?
What's your salary?
What's your total outstanding debt across all types of credit?

Pancakesss

Hi Tixy, many thanks for your reply. I was just about to add to my post to say that I had about 4 months of late payments on several cards back in 2011 (during my student days) when I lost my part time job. Recently, my Yorkshire water bill was 2 months late in Dec 14 - Feb 15 thanks to my disorganised flatmate who said she paid but never did (then hid all the letters). I paid the bill in full as soon as I realised in mid Feb.
I also have an equifax account with a score of 380 (fair). Noddle I am down as only having 1/5.

Can you recommend any mortgage broker companies who will not charge you?

Pancakesss

Hi nido, thanks for your reply also.
I've a few late payments (please see reply above), never been bankrupt, never had CCJ's. Salary is £35k ish.
No more outstanding debt as of May, I'm just waiting for the credit card companies to update the central credit bureau then my credit reports to update

binerds81

Hi Pancakesss

I'm not an expert but everything I had read on this forum shows that there is no such thing as a "score" when it comes to applying for any kind of credit - the score given by Experian is just made up by them as what the "think" you are, but gives no indication of what the banks use for their own internal scoring process.

Applications for credit often result in a search on your credit file and multiple searched in a short space of time can look bad to a lender, so I wouldn't just keep applying to check.

If you get copies of your credit reports from all 3 agencies (experian, equifax and callcredit) for the £2 statutory fee each - no need to pay monthly subscriptions) then you can check what the credit history for every account you have had in the last 6 years including late/missed payments and any defaults - a broker could then tell you if you are likely to be accepted with various lenders depending on their internal criteria - something which an experian score definitely cannot do.

you can then also check you have no financial links that you shouldnt, and check you are on the electoral role as this is also an important thing.

hope that helps a bit - but as always - if you engage a broker their job is to help get you a mortgage and they will know much better how to go about it the best way.

binerds81

ha ha, i was typing that as other people were already saying the same things!!

A broker normally either gets paid for by you, or is free to you but gets paid by the lender - I would try find a good broker rather than just a free one - imho!

Pancakesss

Thanks binerds81.
Should I still wait until my credit reports update to show I am debt free first before approaching a broker? Will brokers will able to issue a mortgage promise/Agreement in principle as I need to look at a few houses first.
Any recommendations for brokers will be much appreciated
TIA

Malmo

Obtain copies of your statutory credit reports from all 3 Credit Reference Agencies (Experian, Equifax, Callcredit/Noddle). You need all 3 agencies reports to obtain a full picture of your profiles. It is worth reviewing all 3 reports well ahead of time before meeting a broker you want to work with, to enable you to spot any errors and have them corrected in good time, or any adverse issues such as defaults, CCJs, missed payments, arrears etc that you may not be aware of. Doing this exercise will ensure that the data that lenders use to credit check you is up-to-date, correct & complete. There is no need to sign up for the monthly subscription services - the scores they generate are irrelevant to lenders and not visible to anyone except you and the credit reference agency.

See links below to each agency's statutory report.

Experian Statutory Report

Equifax Statutory Report

Callcredit Statutory Report AKA Noddle

Check that your current, previous and linked addresses are correct, that you're on the electoral register (this is a UK legal requirement anyway), that any financial associations derived from joint credit accounts are correct or have them disassociated if incorrect.

One suggested method to find a broker (as well as using Google), is to follow the steps in this post, which is to use a directory called unbiased.co.uk.

You can also call up London & Country, who are fee-free. However, my view is that the more adverse your credit history and/or complex your circumstances, the more a fee broker earns their money. You get what you pay for, basically.

takethemon

I have just checked mine online.
callcredit gives a bit more detail than Equifax.
for some reason I have to wait 5 days before viewing Experian's version.
I have to wait for them to send me a pass number to view my data.