Why is disposable income rating so weak?

edatkin123

My disposable income rating is v weak and was wondering why?

I have a decent credit score of 955 but the only reason it's not higher is due to the disposible income rating.

Debt ratio rating is v good
Credit card utilisation is excellent
Disposible income v weak

Briefly, My income is £85000 and my wife £20000
Mortgage £1250 per month
Existing loan £300 per rmonth
2 dependants

I feel disposible income is pretty good. Just wondered if I am missing something.

Thanks

meer53

You haven't said what your disposable income is.

edatkin123

Ah I see. Right that's it......... Time my 8 year old moved out then!

Thanks for the reply.

edatkin123

meer53 wrote: »

You haven't said what your disposable income is.

Never really worked it out. I'd say a few grand a month. The thing is the calculator doesn't ask for that information. Does it just estimate it?

DCFC79

Dont worry about your score, only you and no 1 else can see it.

macman

It's a meaningless, made-up score, nobody sees it. What matters is your credit history.

T-G-C

The credit scoring mechanism is for illustrative purposes, not as an accurate method of determining eligibility for credit and each lender has a different set of criteria and internal scoring methods to assess applications.

That is the correct description of a CRA based credit score. In response to your question however, I do not know what this "rating" is being described.

Lenders conduct what is called an affordability assessment when an application for credit is submitted. This often uses computerized algorithms, bearing the lender's own criteria and requirements in consideration, to determine income and expenditure and ensure there is sufficient disposable income remaining to determine whether the credit product (for a loan, credit card or overdraft) is affordable for the borrower.

Even if you have a high income and pass the basic checks, other factors can influence the final outcome including; data from other credit accounts, the number of searches conducted in a specific time frame and the outcome of fraud, money laundering and identity checks. This fluctuates with each lender and there is no one fixed rating that all companies use, the internal score generated varies with each provider.

edatkin123

Thanks for your reply and explanation.

Sounds like the rating (which is part of the mse affordability score/ report) may not be that important.

Thanks again

PRAISETHESUN

edatkin123 wrote: »

Thanks for your reply and explanation.

Sounds like the rating (which is part of the mse affordability score/ report) may not be that important.

Thanks again

The rating IS not important. Focus on improving your credit history - making sure accounts are paid in full and on time, don't consistently max out your credit cards, etc.

As has been mentioned, every lender has their own internal criteria which they will use to score you - the ratings from the CRAs are mostly just a marketing gimmick.