Affordability very weak - MSE Credit Club

bron20

I'm a bit confused about the affordability section on my credit club report. 
Affordability is coming up as "very weak", but everything else on the report is good. Including my credit score which is 999! 
I've read the information on how they calculate affordability and it still makes no sense. I have nothing on any credit cards. The only debt I have is my car on PCP and my mortgage. 

D3xt3r5L4b

It’s not used by lenders and is mere guesswork. Much like your “999 score”. 

onlyfoolsandparking

The credit club 'affordability' section has not been working correctly (whatever correctly can be interpreted as??) for a long time, lots of threads on here appear to confirm this.

PRAISETHESUN

None of that data (affordability score, credit score, etc) is visible to lenders so you'd be best to just ignore it. Lenders will assess you themselves against their own criteria when you make an application using the data you provide in your application and found in your credit file - hence the focus should always be on your credit history instead. As long as the data on your files is up-to-date and correct then it is an accurate representation of your creditworthiness.

Dandytf

My affordability went seriously negative when I changed to part time earnings,
I'de be supprised if Credit providers didn't use some form of Affordability checks.

[Deleted User]

They do, but nothing like the simplistic credit club ones.

Dandytf

E.g.

Debt to income ratio

Your total non-mortgage debts exceed your annual income. This is likely to be a red flag to lenders, as they won't be confident you're able to repay further credit. Consider whether you can wait and are able to pay off any of the debt you already have before applying for more.

strawb_shortcake

I think that it does also explain that they use ONS to determine what your outgoings are likely to be for credit card and loan affordability whereas a mortgage application would look at your individual expenditure. 

My report is similar to yours, in my case it assumes I have very low disposable income, whereas I manage to save £600 a month and have play money on top.
Luckily I have no need to look for a loan or increase my credit card limits.

Dandytf

I'de like to add in my example, I failed to mention my 5 year car finance, approaching 3rd year early 2021 is why current debt to income ratio is negative.
I look forward to another year or two, and maybe it could be possible to have some positive Data.

williewonder

It also says I have poor affordability despite the ability to save £1000 a month when all bills are paid.

macman

williewonder said:

It also says I have poor affordability despite the ability to save £1000 a month when all bills are paid.

Yes, because lenders have no idea what your income is or what your expenditure is. They can only see your credit history. Your issue could only be a lack of credit history, with no credit card and only debt on your car and mortgage.