Is saving negatively affecting my credit score?

Cantisque

I've started to put whatever I have left at the end of the month into an ISA with Zopa.

I can't link this account with any of the credit score apps so I don't think they have an visibility of it, and since doing that my score has started to drop significantly and I'm wondering if they're interpreting me moving money into the ISA as spending more money? Saying that I have little left at the end of the month, even though I've just moved it.

I was planning to apply for a mortgage in the next 10-16 months so ideally I want my credit score to be the highest it can be, but I also don't want to just leave money in my current account when it would be earning more elsewhere.

Brie

Credit scores are meaningless and the banks will take no notice of them.  It's your credit history that's important.  Is Zopa regulated by the FCA?  That might be what the issue is.  I'm assuming you are simply using the ISA for savings not investment to ensure you have a decent deposit available.  If you show the bank a statement for your ISA that will be reassuring to them.  

Otherwise your credit history might be picking up the fact that there's little money in the bank at the end of the month thus making it look like you are living on the edge of your budget.  Maybe ensure there's a small amount left each month to slowly increase your balance just a bit might do the trick??

la531983

Brie said:

Otherwise your credit history might be picking up the fact that there's little money in the bank at the end of the month thus making it look like you are living on the edge of your budget. 

Erm, no. Bank account balances arent reported to credit reference agencies, its only the use of overdrafts that is.  It doesnt matter if the OP keeps money in a current account or in a savings account, to any lender its the same, its still money that could be youghurted up the wall on a Ferrari the next day, and therefore is irrelevant,

MrFrugalFever

Cantisque said:

I've started to put whatever I have left at the end of the month into an ISA with Zopa.

I can't link this account with any of the credit score apps so I don't think they have an visibility of it, and since doing that my score has started to drop significantly and I'm wondering if they're interpreting me moving money into the ISA as spending more money? Saying that I have little left at the end of the month, even though I've just moved it.

I was planning to apply for a mortgage in the next 10-16 months so ideally I want my credit score to be the highest it can be, but I also don't want to just leave money in my current account when it would be earning more elsewhere.

Your first mistake here is thinking that a generic credit score supplied by a data agency is important. It's not.

I am assuming your Current Account provides you no 'in-credit' interest? If that's the case, why wouldn't you put most if not all of your money in to an interest bearing account such as the Zopa IA ISA?

My NatWest current account provides me with nothing but the means to receive my salary, send money to other accounts via BACs, D/D and S/O and £3 back in rewards for simply logging in to the app once a month, having 2 DD's going out once a month and paying in more than £1000 a month.

With the above in mind, I hold £1 in the account after bills have been paid, transfer all remaining monies out to my savings accounts c. 4.54%AER + instant access and spend on a Credit Card. Clearscore is forever telling me I have no money and Zopa Borrowing Power keeps suggesting to me I should consider what Benefits I am entitled to in order to boost my income - despite over £11k in savings sat in their very own Savings Pots!!

So in short, it's nonsense, all that matters is that you can justify where your money has come from and is going.

I have submitted savings account statements to the mortgage lender with 3 months bank statements, some questions where asked about my large payments to the likes of Zopa and I simply explained they were competitive instant access savings.

Hoenir

A mortgage lender will look favourably on the fact that you've saved for a deposit while managing your personal finances well. 

Edi81

Credit files only report the borrowing you have ie the credit you have taken out. 

Don’t worry about the score - it’s all made up!