Affordability on MSE Credit score showing as low

donnyrovers91

Just a quick question I'd appreciate if someone could help me with this....


I am looking to taking a loan out to buy a car, we have recently bought a property last November but myself and my partner's credit score is back in the good section as it stands.


Our affordability for Credit Cards and Loans shows as very week mentioning about how much money we have left at the end of the month or something. My score updates on the 19th this month.


At the end of each month when we both get paid we put any money left over into our savings account it shows on our report however it doesn't show how much.


Does anyone know if that may be the reason that we are putting money into the savings account thinking we don't have much money left at end of the month.


I also have in my name 2 Hire Purchase agreements totalling approximately £1500 so I'm not sure if this has any effect but it does say about paying off existing debts on the report. We don't miss any payments, have overdrafts etc anything like that.

redux

Don't worry about MSE's affordability score, whatever it is.

I temporarily pretended my income was ten times higher, just for MSE not any applications, plus no rent or mortgage, and it didn't make any improvement at all.

[Deleted User]

Your scores are made up, as are the affordability ratings etc.

A lender will asses you individually (and different to another lender) when it comes to risk and affordability

Ben8282

When you apply for your loan, if you are asked questions about your outgoings presumably you will not include the money that you are paying into your savings accounts as outgoings. Problem solved.
Surprised that your savings account is shown on your credit files. The credit balance of any account will never be shown, only negative balances on overdrawn accounts.
If £1500 is the only balance that you have (ignore any mortgage), unless your income is particularly low it is not a significant amount.
One thing that may possibly be of concern to lenders is the relatively recent mortgage. They may want to reassure themselves that repaying this mortgage is not causing you any financial stress.
As others have said, don't concern yourself unduly with third party opinions of your credit worthiness and affordability.

MSE_Chris

donnyrovers91 wrote: »

Just a quick question I'd appreciate if someone could help me with this....


I am looking to taking a loan out to buy a car, we have recently bought a property last November but myself and my partner's credit score is back in the good section as it stands.


Our affordability for Credit Cards and Loans shows as very week mentioning about how much money we have left at the end of the month or something. My score updates on the 19th this month.


At the end of each month when we both get paid we put any money left over into our savings account it shows on our report however it doesn't show how much.


Does anyone know if that may be the reason that we are putting money into the savings account thinking we don't have much money left at end of the month.


I also have in my name 2 Hire Purchase agreements totalling approximately £1500 so I'm not sure if this has any effect but it does say about paying off existing debts on the report. We don't miss any payments, have overdrafts etc anything like that.

Hi,

Thanks for your question.

The disposable income figure takes into account data you've provided to us (e.g. salary, dependents, mortgage), plus items from your credit file. This’ll include your loan and credit card balances (even if you pay off in full each month), plus any other debts showing. Your savings are never taken into account when you apply for credit (credit cards, personal loans etc), so we don't ask for this information when you join Credit Club, nor does it appear on your Experian report.

To check these details, just go to the Credit Report tab within your account.

With most credit you apply for, lenders estimate your expenditure and how much you can repay each month after housing and other outgoings, using data from the likes of the Office for National Statistics. This looks at what someone like you typically spends. As we try to copy lenders’ assessments, this is how we calculate this score too. So this is why your disposable income score in Credit Club may not reflect your exact circumstances and doesn't look at your actual bank account spending/saving etc.

It’s possible to have low affordability scores, even if your Experian Credit Score is high and you’re showing as a good chance of being accepted for products. Remember, your Experian Credit Score, just looks at your Credit History, it doesn’t take into account your earnings or expenditure, so is only part of the story. This is why we created the Credit Hit Rate, so you get to see the full picture. If you’re seeing high scores, but yet your affordability is low, it indicates that lenders would still likely offer your products, but you may get a worse rate or lower credit limit.

However, the main figure we encourage our users to check is their Credit Hit Rate. This figure takes both your credit score and affordability into account, mimicking the checks which lenders do. So by focusing on your Hit Rate, you'll be able to understand your chances of being accepted for credit.


I hope this helps explain how the disposable income indicator works but let me know if you have any questions.

MSE_Chris

redux wrote: »

Don't worry about MSE's affordability score, whatever it is.

I temporarily pretended my income was ten times higher, just for MSE not any applications, plus no rent or mortgage, and it didn't make any improvement at all.

If you play around with your income amount in Credit Club (for eg, increase your income by £20K etc), it won't reflect in your affordability scores straight away. This is because your affordability scores update when your credit score next updates and you'll only see it reflected then.

However, it will reflect in your eligibility scores (% chances of being accepted) straight away.

I hope this helps explain why you didn't notice an immediate difference.

nick74

MSE_Chris wrote: »

The disposable income figure takes into account data you've provided to us (e.g. salary, dependents, mortgage), plus items from your credit file. This’ll include your loan and credit card balances (even if you pay off in full each month), plus any other debts showing.

Despite that I do wonder if there's an issue with the way it calculates affordability as after months of always showing 'Good' on my report it suddenly plummeted to 'Very Weak' late last year, and has stayed there ever since. This was for no apparent reason whatsoever.

[Deleted User]

You can safely ignore it still despite the “advice” above