MSE Credit Club Update - Affordability Score

cw182

Hi all.
I'm thinking of remortgaging now to lock in a low rate for a while. I got my MSE Credit Club update email the other day and when I logged in, my loans and credit card  affordability is suddenly very weak, despite previously being very good and nothing really having changed since last month other than a pay rise which I'd updated in my account. 

My credit score is still 999. It says my debt ratio is very good and my debt utilisation very good, but my disposable income is now down as very weak. I can't see why this would be, with mortgage repayments of 21% of household income and no other loans or finance arrangements. All I can think is that earlier last month I paid off a balance transfer card "in full" after the 0% period had ended. Perhaps it has taken this as meaning I have to pay big credit card repayments every month even though it was a one off?

I'd like to understand this and correct it if necessary,  as I understand it is run by Experian and therefore may affect my remortgage application.

Thanks in advance. 

D3xt3r5L4b

Ignore it.
No lender sees the scores or ratings. 

[Deleted User]

As long as nothing has changed in your circumstances, there will be no difference in your credit worthiness, aside from any change in lending criteria.

Experian don't determine your credit worthiness or acceptance likelihood.

cw182

So 5 months on and the MSE affordability scores are still very weak for loans and mortgages. Credit score still 999, mortgage 21% of net household income, and no loans or credit card balances. Really weird.

[Deleted User]

Why is it weird?  The algorithms and scores are just poorly constructed, hence the output (ie the scores) won't give an accurate indicator in most cases.

cw182

Deleted_User said:

Why is it weird?  The algorithms and scores are just poorly constructed, hence the output (ie the scores) won't give an accurate indicator in most cases.

It's weird because, until 5 to 6 months ago, it gave me very good/excellent affordability for loans and mortgages. My credit score has stayed the same at 999, I've paid off a small credit card balance, and my income is higher, but now MSE says I have low affordability for a loan or mortgage. Doesn't make any sense.

Grumpy_chap

The credit score part is related to how you manage existing credit accounts, but seems to overly favour "stability" in my opinion.

The affordability part is trying to give an assessment of whether the individual can support further repayments.   
Current liabilities are reported by credit companies. 
I am not sure what data the CRAs have to assess the income side of the affordability calculation - I don't think that bank transactions or salary data is automatically passed to the CRAs.  I don't even think the CRAs get reported if made redundant, JSA, UC, or start a new job.

I know I get a high credit score but zero affordability, which is not aligned with my own assessment.

It is hard to see how the affordability score is anything more than a guess.

Maybe someone here can explain the affordability score and how the CRAs have data to make this assessment.

cw182

Grumpy_chap said:

The credit score part is related to how you manage existing credit accounts, but seems to overly favour "stability" in my opinion.

The affordability part is trying to give an assessment of whether the individual can support further repayments.   
Current liabilities are reported by credit companies. 
I am not sure what data the CRAs have to assess the income side of the affordability calculation - I don't think that bank transactions or salary data is automatically passed to the CRAs.  I don't even think the CRAs get reported if made redundant, JSA, UC, or start a new job.

I know I get a high credit score but zero affordability, which is not aligned with my own assessment.

It is hard to see how the affordability score is anything more than a guess.

Maybe someone here can explain the affordability score and how the CRAs have data to make this assessment.

I was under the impression, possibly wrongly, that the MSE credit club tool bases the affordability calculations on the income figures you input to the site, combined with the outstanding debts on your credit report. That's why I can't understand why they both now show as low and were previously both high, since my income has increased and debts decreased. Maybe the MSE tool is broken?

Grumpy_chap

I ignore the affordability - it has always shown as 'zero' for me.  The only important thing is the base information, and ability to spot any errors.

Malkytheheed

The affordability thing is absolute garbage. It's less meaningful even than the scores! Ignore it entierly.