Owner of LTD and personal credit score

[Deleted User]

Hi,
i was wondering if anyone could help- i am planning to open LTD company and so i was wondering if being an owner/director of LTD would affect my personal credit score in a bad way? Or in any way? ( for mortgage etc)

Further explanation of my situation: i work full time and want to continue working full time while running a small business on side. It will be LTD and I am not planning to register as self employed (already discussed pros and cons with my accountant and decided i want my company to be completely separate from my personal finances, so that is not a question).

Many thanks for your help

[Deleted User]

Your fictional credit "score" is nothing to be worried about, any changes to personal circumstances can make the score go up or down or not move at all depending on which way the wind is blowing.

[Deleted User]

@Farfetch, I’m sorry, but I am not sure what you mean by fictional credit score?

sourcrates

[Deleted User] said:

@Farfetch, I’m sorry, but I am not sure what you mean by fictional credit score?

You should do some research, the credit score you see is at best a good guess at how you manage your finances, its used as a marketing tool by the CRA`s, most of them are credit brokers you see, they use the credit score to sell you credit cards and loans etc, and only you see it, lenders don`t.
The number will change randomly, and for silly reasons, the aim of this is to profit from your vanity.
Its nothing more than an indication of your credit worthiness.

[Deleted User]

[Deleted User] said:

@Farfetch, I’m sorry, but I am not sure what you mean by fictional credit score?

Per the comprehensive and excellent advice from @sourcrates above

I don't want to advise on connections between business and personal debt but don't worry about the score, you'll see it go up and down all the time. As an example I got a "warning" that my score was affected on ClearScore (for Equifax) because I'd "gone near my credit limit" - which is triggered at 50% - yes really, 50%. What it actually means is I had got to 52% of available credit on a BT card - shocking I know! My score went from 502 to 504 in November, then down to 498 in December because I got a new CC for BT purposes which I put about £2500 on. So my debt has noticeably increased but that was only 6 point drop?!

I have no missed payments for the last 6 years (never had any for the record) and I have 46% of credit used overall from a total available which is a little less than my annual salary but my scoring is 5/7 effectively, if I was scoring myself, it would be lower

Grumpy_chap

[Deleted User] said:

@Farfetch, I’m sorry, but I am not sure what you mean by fictional credit score?

You may find this guide useful:
https://www.moneysavingexpert.com/loans/credit-rating-credit-score/?_ga=2.32709309.229947658.1611387942-2075961619.1611387942

In summary, the credit score is just a number that you see, whereas lenders base decisions on actual credit history / records on file plus affordability.

Barry_Bear

As Farfetch and sourcrates have said credit scores are not defined empirical values, especially those promoted to consumers. The in house service is as good as any:
https://www.moneysavingexpert.com/loans/check-free-credit-report/

Company scores differ with agencies and the difference is that these agencies calculate actual £ credit ratings, but this is for trade credit. But again you can see the principle for scoring without paying for anything:
https://www.firstreport.co.uk/Free-Company-Credit-Check.aspx

bermudianmark

Its not going to impact, also if you use your accountants address as the registered office there is then less of a footprint to connect you with the company.

macman

If you set up a ltd company then you will probably be taking any profits in the form of a small salary and a dividend, as that is more tax efficient. You wouldn't then be self employed, you would be an employee of the company. 
As a lot of small company owner/directors have found to their cost during lockdown, as they haven't qualified for SEISS, nor furloughed themselves.
Since a ltd company is a separate legal entity, I don't see how it's performance can affect your personal creditworthiness, unless the company has borrowed using a personal guarantee from the director or owner? For example, if you used your own property to secure a business loan.