MSE Credit Club - Excellent Credit Rating but poor Affordability score

robster89

Hi there,

I was hoping someone could help.

I’ve been working to improve my credit score over the last 12 months as I’m hoping to apply for a mortgage later this year. My credit rating on MSE Credit Club is now within the ‘Excellent’ category (969), however my Affordability Score is ‘very weak’.

Within the Affordability score Debt Ratio and Credit Utilisation are both the top rating ‘V Good’ but ‘Disposable Income’ is the bottom rating ‘V Weak’.

How is disposable Income calculated here? The info is very generic (e.g. general estimates for someone like you’ suggesting it’s not a personalised score for me?

I earn £40k and have no dependants and fairly good disposable income!

Thanks guys

[Deleted User]

Ignore any scores and ratings as they are made up.

If in doubt speak to a decent mortgage broker and see what they can offer you

Craig1981

I wouldn't worry too much about that sort of thing


lenders want to see debt to income ratio below 45%, around 35% is healthy (as per nationwide)


How to calculate your ratio

1. First, add up your recurring monthly debt – this includes rent or mortgage payments, car loans, child support, credit cards and student loans. Some banks and building societies will include the new loan, so it’s best to include your expected monthly payment.
2. Then tot up your monthly income. As well as your gross wages (before tax and national insurance contributions), don’t forget to include freelance income or child benefits.
3. Finally, divide the monthly debt by your monthly income and multiply it by 100. So, if your debts came to £1,020 and your monthly income was £2,916 your debt-to-income ratio would be a healthy 35%.

I am married, have two dependants, rent, have a loan, have credit cards with £0 balances etc, my figure is 37%... MSE says my affordability is also V.Weak


hope this helps

robster89

Thanks guys.

My debt to income ratio is healthy - I think the concern was that the 'disposable income' part of affordability coming in so bad looks like an anomaly, just curious why IT'S MARKED THAT WAY.

Cheers

[Deleted User]

Because it's a guesstimate

Lenders will rank you per their own way

PRAISETHESUN

I personally wouldn't be worrying. The scores you get from MSE Credit club, Experian, or whoever are basically meaningless. Every lender uses their own internal scoring based on the contents of your credit file, so what matters most is your credit history. The affordability score is also going to differ depending on which lender you use. It's not until you approach a specific lender that you will really know what exactly they are looking for