How to maintain a credit score when mortgage paid off?

scott_e

Morning.

Hoping someone can offer some advice around credit scores please.

After a 10 year self imposed austerity drive I am in the thankful position that I can pay off my house mortgage next month.

At that point I am clear of all debt (no PCP car contracts, loans, mobile phone credit of any sort) so presumably my records of paying on a schedule payment plan will stop at that point an therefore my credit score will suffer.

Should I ever need to borrow again, say buy to let mortgage, clearly the best credit deal wont be accessible with no recent credit history. I am early forties by the way so strong chance I will need credit at some point.

Never had a credit card but I have toyed with the idea of getting one with a small balance and paying a monthly bill with it for no other reason but to maintain monthly credit updates.

Can someone please offer some advice around the best course of action to maintain my credit score into next year and beyond?

Thanks for any help.
Scott

[Deleted User]

The best advice is always to ignore your score. It's a fictional number that you don't need to worry about. Plus, it will probably depress you when it drops as a result of clearing your mortgage.

Look to maintain credit history instead. Simply use a credit card regularly, clearing in full each month.

scott_e

Thank you for the reply.

Surely the "credit score" and "credit history" are intrinsically linked ? A good history is reflected in a higher score.

[Deleted User]

No. Credit scores are blunt tools that largely react to change. Hence why bankrupts and 18 year old have high credit scores - they have no recent credit activity.

Equally, scores tend to drop when debts are paid off, because it's a change.

Lenders on the other hand, value positive, low risk behaviour, not lack of activity.

Only ever look at the data, as a lender would.

scott_e

Good man thank you. That is useful advice.