Paid off mortgage. Credit rating dropped. Really?!!

Rodtheplod

Hey all,
So I’ve come a long way from having financial issues 11 years ago, to have now paid off my mortgage. The Experian credit score from the MoneySavingExpert Credit Club hasn’t registered the change yet, (it’s still at 999) but I also have a Credit Karma account, which has dropped by 7 points due to “a change on my credit file”. Credit Karma shows the change as my mortgage account being settled. I guess I’m no longer seen as financially stable as I no longer have a mortgage. 

The problem is, I wanted to treat myself to a new car on PCP, but am now worried I won’t get as good a deal (APR) due to my lowered credit score - and that might worsen when Experian updates. 

Seems like I should have applied to get the car *before* settling my mortgage. Any ideas on how to raise my credit score again, before I go for the new car?

Thanks for any advice!

MovingForwards

Ignore the credit score and rating, they are not seen or used by any UK financial institution. It's the credit history they see.

If you want the new car on PCP there's nothing stopping you.

Rodtheplod

MovingForwards said:

Ignore the credit score and rating, they are not seen or used by any UK financial institution. It's the credit history they see.

If you want the new car on PCP there's nothing stopping you.

Thanks so much, MovingForwards - you’ve just made my day! 

MalMonroe

I agree!  I got a car on PCP last year (0% interest for the whole term), all the time holding my breath that they'd refuse my application because of my poor credit history. But that was in the past and when they said 'yes' straightaway, I didn't know what to do!  So I jumped in 'my' (I know it's not really mine) new car and drove away. It's a great feeling!

Sometimes credit scores do go down anyway when you pay off something, like a mortgage or a large credit card balance. Nothing to worry about, no lender can even see your score never mind use it, so off you go, enjoy!  (Your score will go up again anyway, just in case it worries you.)

SpreadableToast

Rodtheplod said:

Hey all,
So I’ve come a long way from having financial issues 11 years ago, to have now paid off my mortgage. The Experian credit score from the MoneySavingExpert Credit Club hasn’t registered the change yet, (it’s still at 999) but I also have a Credit Karma account, which has dropped by 7 points due to “a change on my credit file”. Credit Karma shows the change as my mortgage account being settled. I guess I’m no longer seen as financially stable as I no longer have a mortgage. 

The problem is, I wanted to treat myself to a new car on PCP, but am now worried I won’t get as good a deal (APR) due to my lowered credit score - and that might worsen when Experian updates. 

Seems like I should have applied to get the car *before* settling my mortgage. Any ideas on how to raise my credit score again, before I go for the new car?

Thanks for any advice!

No point in trying to raise your score anyway, it'll only drop again when you apply for finance.

Time2Go_25

Do people not read the very first pinned post in this board.

Rodtheplod

pdel61 said:

Do people not read the very first pinned post in this board.

Thanks pdel61 - and apologies. I did skim that first post, but neglected to read it fully.
Thanks for the other replies, though. I always knew I wanted to treat myself and upgrade the old banger after paying off the mortgage, and was a little dismayed when I checked my score and saw it drop. So I guess I panicked a bit! Glad to hear your responses, though, and now I’m looking forward to my new motor!

Best regards!

[Deleted User]

Credit scores are worthless, and not worth the cyberspace they use. It’s credit file, eligibility and affordability scores that count.

cymruchris

Hope you'll be very MSE in choosing your new car Or are you going all out for a sporty little number? Watch your magic number score drop again when your credit agreement appears on your file. Then watch it climb back up again after a few months of payments. That is until you apply for something else and it goes down again. 

Rodtheplod

cymruchris said:

Hope you'll be very MSE in choosing your new car Or are you going all out for a sporty little number?

Haha nah I’m not going to go mad. I drive a 2002 VW Golf at the moment with over 200k miles on the clock - trust me it’s seen better days! I plan on getting something just a little newer and a bit more comfortable (I’m tired of a car who’s heater barely gets warm). 

Thanks again for all the feedback!