£200k a year income; PCP declined for £650 pm

DCFC79

fabiantony wrote: »

Thanks a million, much appreciated.

Is that the same for credit hit rate indices? - meaningless?

The credit scores/ratings are how the ref agencies view your report but they aren't perfect as not all lenders will report to all 3 but report to 1.

fabiantony

JJG wrote: »

Well there is wiggle for additional expense. You're "saving" 5500 a month. What's the point in "saving" that amount of money, to then borrow at a ridiculous interest rate? And FYI 'disposable income' is income after all bills, obligations etc have been paid. It is not your salary after taxes.

Depends how you see it.

As a contractor not really. Pension is not liquid savings. Nor is 'house deposit' - as once I buy a house, we aim to continue saving for a second purchase (again, as a pension investment).

The only capital freed would be the wedding allocation once married, and again, I'm sure that would go into something else (aka family etc). Things like rainy day fund are debatable, but thinking about it with that abstraction layer works for us.

Regarding disposable, there is a difference here. My actual personal income a month is around £10,000, however of that, only £8,500 is disposable since I need to pay capital gains tax on that - hence me calling it that.

Many thanks for the suggestions!

System

200k job as a IT contractor. I wish I earned that much, I studied BEng (Hons) in Electronics and Telecommunications and also have a BEng (Hons) in Engineering Management. I feel that I made the wrong career move......

jamesd

Pixie5740 wrote: »

Given that lenders don't use the scores and that Experian, Equifax and Call Credit don't lend money those scores are totally meaningless. Yes it's wise to check that the entries on your credit files are accurate but the scores...just a marketing tool, no more no less.

Lenders don't use those scores but the ways that lenders calculate the credit record parts of their own scores is likely to be similar so they are of use, particularly for watching trends. Definitely don't pay for them, though, there's no need for that!

The quotation searches are likely to be far more accurate since those do use real lender scorecards and extra information beyond the credit record.

The difference here is between what's useful and what's meaningless. The scores aren't meaningless, after all, they are calculated based on the real credit record. But they also aren't exactly what is done by lenders, so it's necessary to be aware of just what they do and don't do.

That sort of thing is why MSE describes paying attention to credit scores as vital, but not so much the ones from the credit reference agencies. And of course it's part of why MSE itself is providing monthly updates to one of the credit reference agency scores as part of its Credit Club service.

jamesd

fabiantony wrote: »

So while I can completely appreciate that my current lines of credit amount to £800, I fail to understand why my historic credit line does not seem to be relevant - I had a £10k personal loan from my bank (see original post) which I paid early without issues. Does that not account for anything? and rather just whatever debt I am on today

It counts but recent things always count more. Neither of them is a huge thing, just part of how things will get scored by lenders. While the UK lenders do not use the FICO score it is worth reading up on how it's calculated because the same principles do apply.

fabiantony wrote: »

What is the rule of thumb that one should aim to have available as credit before it becomes a negative factor?

Reports vary widely but the risk aspect is that you could use all of the available credit. I don't recall ever reading any really good guidance on this. There's more on utilisation, with various sources suggesting levels of from 10 to 30% as being a good limit for maximising the chance of being accepted. the various effects also depend on income because a person with low income is more likely to be stressed financially at lower levels due to just the minimum costs of living.

Of course credit scores are there to be used when there's a benefit and that's under-using your potentially available credit, so there's a trade off to be made. As a stoozer, with long term good history and no late payments even in the visible six years, I have a total amount of available credit that's only a little under my gross income and utilisation of about 78% at the moment. That's because I make money from using the credit and making money matters more to me than the credit score effect.

sharp910sh

And im struggling on £2k a month...

pelirocco

fabiantony wrote: »

Depends how you see it.

As a contractor not really. Pension is not liquid savings. Nor is 'house deposit' - as once I buy a house, we aim to continue saving for a second purchase (again, as a pension investment).

The only capital freed would be the wedding allocation once married, and again, I'm sure that would go into something else (aka family etc). Things like rainy day fund are debatable, but thinking about it with that abstraction layer works for us.

Regarding disposable, there is a difference here. My actual personal income a month is around £10,000, however of that, only £8,500 is disposable since I need to pay capital gains tax on that - hence me calling it that.

Many thanks for the suggestions!

Capital gains tax ?? Are you sure

£200k a year = £16+k a month , with that amount of earnings I would expect you to be running as a ltd company , taking dividends and the company paying corporation tax....does that figure include or exclude vat ?

That's either a very long working day or extortionate hourly billing

fabiantony

pelirocco wrote: »

Capital gains tax ?? Are you sure

That's either a very long working day or extortionate hourly billing

Yes, capital gains. And yes, I am the director at my LTD.

There are several ways of doing things as a contractor, and you might be thinking of other ways.

Long story short, "I" pay tax twice. When my company bills an invoice for say £1,000 then the company pays between other things corporation tax. That leaves net profit aprox at say £850. Assume no expenses, etc, I withdraw the profits of £850. Now, once those personal dividend withdraws reach the HMRC threshold (if i remember correctly 36k for the first band), I, as an individual, I'm responsible for declaring and paying my taxes on that according to the tax bands etc.

Based on yearly projections I (even if not at the threshold yet) start setting aside the tax money which i will incur for the financial year.

Hope that explains it.

£200k a year = £16+k a month

Oh, and regarding that. Take home pay is not 'Salary/12' (ie. £200k/12) - Not in contract, not in any job.

fabiantony

sharp910sh wrote: »

And im struggling on £2k a month...

Im sorry to have sounded petty

I've been working professionaly for around 6-7 years - If it makes you feel any better my salary for 4 years after uni was 30k. I kind of caught a break after working (in all fairness) insanely hard. I was working 60-70 hour weeks easy in a fairly specialist job.

fabiantony

mrlegend123 wrote: »

200k job as a IT contractor. I wish I earned that much, I studied BEng (Hons) in Electronics and Telecommunications and also have a BEng (Hons) in Engineering Management. I feel that I made the wrong career move......

I am probably risking sounding like an even bigger duche, but, for transparency's sake;

I got my BSc and MSc in Computer Science, both from Cambridge, top of my class.

Specialised in a difficult, high demand low supply field - Artificial Intelligence and High Performance Computing. Then continued to evolve my skill set in ever more cutting edge practices, which, as they raised in popularity and desirability allowed me to pretty much put a price on what i do for a living.

That being said, I know of a lot of people that work extremely hard and I wish they will get compensated 10x as I do. Sadly, luck and (especially in my field) interpersonal skills (or lack of) play a big factor in moving forward.

My 2 cents.