How to build up my credit score for a mortgage ?

bazzyb

TELLIT01 said:

Deleted_User said:

Your credit score isn't a real thing in the UK and not used for any sort of borrowing. The scores provided by CRA are just gimmicks provided for entertainment only. You'll be assessed by lenders on your credit history and circumstances.

You need to build some history, but not with the likes of Klarna, which can suggest to lenders you have no disposable income and are higher risk.

Try to get a credit card from your bank. Use it and clear in full each month once you get the statement. Repeat ad nauseam. Time will do the rest.

Really?!  My niece is in the process of selling her house and the purchasers thought they had a mortgage offer in place.  However, their lenders told them that, because they hadn't taken out a mortgage within 6 months of the offer, they would have to recalculate their rating.  The purchaser was shocked to be told that their rating had been reduced because the previous offer had expired.  That would certainly suggest that credit rating are very much a real thing.

The ‘not real’ comment here refers to a universal credit score, such as those advertised by the main CRAs. However credit scoring is very much a real thing - any potential lender will assess creditworthiness and generate their own score according to their own criteria as opposed to just relying on what Experian etc tell them. 

In this example, the mortgage company in question will be taking a fresh look at their credit history and seeing if there have been any significant changes etc before issuing a new mortgage offer. 

[Deleted User]

TELLIT01 said:

Deleted_User said:

Your credit score isn't a real thing in the UK and not used for any sort of borrowing. The scores provided by CRA are just gimmicks provided for entertainment only. You'll be assessed by lenders on your credit history and circumstances.

You need to build some history, but not with the likes of Klarna, which can suggest to lenders you have no disposable income and are higher risk.

Try to get a credit card from your bank. Use it and clear in full each month once you get the statement. Repeat ad nauseam. Time will do the rest.

Really?!  My niece is in the process of selling her house and the purchasers thought they had a mortgage offer in place.  However, their lenders told them that, because they hadn't taken out a mortgage within 6 months of the offer, they would have to recalculate their rating.  The purchaser was shocked to be told that their rating had been reduced because the previous offer had expired.  That would certainly suggest that credit rating are very much a real thing.

The credit rating (the data on your file) is absolutely a real thing, the gimmick score that you get isn't. Lenders don't see or use that score but the CRAs rely on human nature and our obsession with numbers and numbers getting bigger to sell this idea of a credit score. My opinion is that they want to move us to the US model where your score rules your life and they have huge amounts of power. Front line agents at lenders use credit score when talking to people as it's a simple term that people know about from all the adverts or even because they don't know any better.

When you are assessed for lender, lenders use their own internal scoring system for your data (or buy in a scoring system from the CRAs) but this is not the same as the horoscope that the CRAs provide and you will never see the number or methodology to prevent you gaming the system

anotheruser

Deleted_User said:

Your credit score isn't a real thing in the UK and not used for any sort of borrowing. The scores provided by CRA are just gimmicks provided for entertainment only. You'll be assessed by lenders on your credit history and circumstances.

You say this but it's still an indication of credit history.
I'd bet someone with a score of less than 200 won't get a credit card, but someone with a score of 800+ would do.

MaryNB

anotheruser said:

Deleted_User said:

Your credit score isn't a real thing in the UK and not used for any sort of borrowing. The scores provided by CRA are just gimmicks provided for entertainment only. You'll be assessed by lenders on your credit history and circumstances.

You say this but it's still an indication of credit history.
I'd bet someone with a score of less than 200 won't get a credit card, but someone with a score of 800+ would do.

My friend had a score of over 900 with Experian. He was refused a loan he was more than able to afford. He was fuming. With a high credit score and decent earnings he couldn't understand why he was refused.

Santander didn't care that Experian gave him a 900 credit score. What mattered was that he had just remortgaged and they wouldn't grant him a loan until 6 months had passed. That's the issue, the CRAs' scores don't account for individual lenders criteria. The banks are the institutions that grant the loans, not the CRAs. 

My colleague has a decent credit score but can't even get a credit building credit card because she hasn't been a UK resident long enough.

Except for maybe a few small minor lenders that pay a CRA for their credit score, most lenders do their own internal scoring using the data available on the credit reports. That's the score that matters. 

Ebe_Scrooge

anotheruser said:

Deleted_User said:

Your credit score isn't a real thing in the UK and not used for any sort of borrowing. The scores provided by CRA are just gimmicks provided for entertainment only. You'll be assessed by lenders on your credit history and circumstances.

You say this but it's still an indication of credit history.

No it's not.  It is perhaps, at best, an indication of the CRA's assessment of your "credit-worthiness".  This is totally different to how a lender would assess you.  Each lender will have very different criteria - for that reason alone, if nothing else, there cannot possibly be "one score that fits all".  For instance, it's well-documented that the CRA score will drop in response to any change in your credit status - simply taking out a new credit card will make your score drop.  As will paying off your mortgage when you win the lottery - yes, all of a sudden you've got substantially less debt than you had last month, but your score will still drop.  The CRAs like to see stability, that's about it.

There are a small number of lenders - usually the smaller or new companies - who will use a score generated by the CRA.  But even then, it's not the score seen by you - the lender will tell the CRA what their criteria are, and what weightings to assign to each data point, and the CRA will generate a customised score.  But it's only a small number of firms that do this - the vast majority, and certainly all of the big well-known ones, have their own internal (and usually incredibly complex) scoring algorithms.