Credit report help

scottyleics

Hi all,

I am looking for a bit of advice to improve my credit report if possible please. Each of the services I use,  including the MSE one give different advice. 

The main reason I ask is I want to get a first time mortgage this year.

The scores, for what they are worth are below.

Scores below:
Experian 968
Credit Karma 617
Clearscore 817

So, my salary is £55700 per year, I have a car (£20k ish on HP) but no other debt. I have a credit limit of £68,000 across a few credit cards. £33k with MBNA, £15k with Barclaycard and the rest with my bank, Halifax. 

Currently I try to do my entire spending on credit card, and pay in full once I get the statement. 

I also try and use things like Klarna and PayPal pay in three where possible, on the principle that lending at 0% should always be taken to keep money in my accounts. However, I do appreciate these methods do not yet have an impact on credit reports, and won't until 2025.

What should I be doing at the moment to improve my score and lending suitability for a first time mortgage?

MalMonroe

Hi, there is a lot of information from this very site in the link below, updated on 14 March -

https://www.moneysavingexpert.com/loans/credit-rating-credit-score/

[originally written by Martin Lewis - now regularly updated by the editorial team.]

As you will see, it says "The three credit reference agencies, Experian, TransUnion and Equifax, have individual ways of scoring you, meaning the numbers you see may be different for each one. Interestingly, lenders don't see this score at all – it's just for you."

So pay no attention to your scores. But do pay attention to the information in the credit reports, that's where you can check that the information they hold about you is correct. 

Hope that's helpful. 

Sarahspangles

scottyleics said:

Hi all,

What should I be doing at the moment to improve my score and lending suitability for a first time mortgage?

I think having so much available credit, even though you’re not using it, might count against you. You could theoretically take out a mortgage so you’re a bit ‘stretched’ and then max out your cards and struggle to service your combined debts.  You don’t want them to approve you for a mortgage, only to have them increase the rate to cover the higher risk (to them) that you’ll default.

The advice used to be to actually use a card to show you have a history of repaying credit, but to never use more than half your credit limit so you don’t look stretched.  Then a few months before you apply, put even less through and maybe reduce the limit or even have a clear month you don’t use it at all.  

Mortgage companies sometimes made mortgage approval conditional on you closing cards or reducing credit limits.  They knew once the mortgage was reported, you’d be unlikely to get that credit headroom in future.

If you retain as your only or main card one that has a lower interest rate, that signals you’re not a ‘sub-prime’ customer.  There may be useful perks with other cards but they won’t know you’re only in it for the free cinema tickets.  If you need to put an unexpected cost on a card after you’ve moved you’ll appreciate the lower rate.

cymruchris

I'm not a mortgage expert but you certainly don't appear to be doing anything particularly 'bad'. 

You haven't mentioned what your intended deposit percentage is for the mortgage you think you're going to need. One thing that I often notice is that the better the deposit, the better the deal to an extent. You'll get a better chance of success with say a 20 percent deposit over a 5 percent deposit, and likely see marginally better rates too.

Are you considering finding your own mortgage or using a broker? 

A good broker would certainly assess your circumstances and recommend the best deal with the highest chance of success. (There are several on the mortgage board here that might be able to advise further)