MSE Credit Club affordability

Simmy77

Can anyone explain how this is calculated ?

From what I've read, it's about how much spare cash you have. My affordability is very weak despite me having approx £500 per month of spare cash

Thanks

T-G-C

An affordability assessment is based on a number of factors. These include but are not limited to; the overall amount of credit utilized, income, employment status and account handling & status with other lenders.

The amount of disposable income remaining is not a sole contributor, therefore having £500 spare per month does not automatically consider further borrowing requests as affordable.

Simmy77

Thanks for the reply

My Credit Score is 982

Income approx £1250 month

Outgoings £480 month

1 loan outstanding £10,000 initially, owe £5,800 now

2 credit cards, one interest free with £300 on it, limit of £1500 other used for shopping and paid in full monthly limit of £9,500

Home owned outright

I'm self employed so don't know if that could be a factor.

Actual credit report perfect apart from this affordability

T-G-C

Simmy77 wrote: »

Thanks for the reply

My Credit Score is 982

Income approx £1250 month

Outgoings £480 month

1 loan outstanding £10,000 initially, owe £5,800 now

2 credit cards, one interest free with £300 on it, limit of £1500 other used for shopping and paid in full monthly limit of £9,500

Home owned outright

I'm self employed so don't know if that could be a factor.

Actual credit report perfect apart from this affordability

All lenders use their own affordability assessment. It is based on the type of credit, amount of credit and the demographic of these checks are normally based on whether the provider is mainstream or subprime category.

Thanks for providing an example of your financial situation, however I am not a lender and therefore cannot state whether those figures are enough to equal good or bad affordability.

Out of the credit you have stated however, I would imagine that the £10,000 loan would have a greater impact on affordability than the credit card usage mentioned.

As is the cliche here, ignore the credit score provided, it is not an accurate representation of whether a lender would accept you or not.

[Deleted User]

£500 spare cash is weak. That!!!8217;s not a lot at all.

I guess your salary is around the £16/17k.

You have credit cards totalling £11,000 in available credit and a £10,000 loan with £5k remaining.

So you!!!8217;re basically over or close to your incoming salary in credit already.

Nasqueron

If you have £500 a month spare why do you have a loan (or why are you not clearing it off quickly)?

Spare cash is not seem by the lenders, only income and loan/CC payments

Simmy77

I got a loan to buy a new van and I’ve also put some away into a lifetime ISA.

The loan was started Nov 2016 I have been making extra payments.

I wanted to borrow more to get a new car. I thought with having roughly £500 per month to “ play with “ getting another loan costing £180 - £200 per month would not be a problem.

Will reducing the credit card limit down from £9,500 help ?

[Deleted User]

No

I would throw any spare money to clear the loan - or make cut-backs to throw even more at it

Nasqueron

With £500 a month free your loan could be paid in a year, it could have been paid off already. Pay that off then get a new loan (or save the £500 a month and you'll have the money to buy cash in 2 years)