Improving credit score to secure a mortgage?

[V8 Stang]

I really want to get myself a mortgage, rather than paying a large amount of money a month on rent.

Now due to being a bit foolish a few years ago I do have a loan (around £6000 remaining) and around £5000 on credit card (but at 0% apr).

Also have a PCP on my car, which clear score shows as a £30,000 loan!

Ive done a credit check on clear score, and im getting 462, which it seems is not the best? But ive not had any missed payments etc.

So would prefer to improve this if possible.

I notice I actually have a combined credit card limit of £49,000! is this bad?, and would I be best to close unused accounts to bring this down?

I have enough savings to pay off either the loan or credit card (whilst still leaving a house deposit). Am I better off clearing either the loan or credit card?


I would be looking for a mortgage on my own, on a £40K salary, and looking to borrow around £170K.


Anyone any advice to put myself in the best position?

Cheers

[thebraketester]

Having lots of credit stacked up on cards and cars won't do your affordability check any good I dont think

[Sarnie]

V8 Stang said:

I really want to get myself a mortgage, rather than paying a large amount of money a month on rent.

Now due to being a bit foolish a few years ago I do have a loan (around £6000 remaining) and around £5000 on credit card (but at 0% apr).

Also have a PCP on my car, which clear score shows as a £30,000 loan!

Ive done a credit check on clear score, and im getting 462, which it seems is not the best? But ive not had any missed payments etc.

So would prefer to improve this if possible.

I notice I actually have a combined credit card limit of £49,000! is this bad?, and would I be best to close unused accounts to bring this down?

I have enough savings to pay off either the loan or credit card (whilst still leaving a house deposit). Am I better off clearing either the loan or credit card?


I would be looking for a mortgage on my own, on a £40K salary, and looking to borrow around £170K.


Anyone any advice to put myself in the best position?

Cheers

You won't have a problem passing a credit score for a mortgage......you have evidently passed the credit scoring for the credit you have.

As long as your affordability can absorb the commitments you have currently then it shouldn't be a problem

[Greshamst]

You probably should reduce the amount of available credit card limits, if you are not using them. As from a lender’s perspective, that is debt you could run up if it all went t1ts up.

Another important point to consider is your percentage utilisation of credit card debt.
Aka using £1000 of a £10,000 limit (10%) is much better than £500 of a £1,000 limit (50%) even though the debt is bigger.

Keep one or two of your highest limit credit cards, close the rest. Make sure your 0% card is t using over 75% of the available credit limit.

Pay off credit cards rather than loans. Credit cards are unpredictable and make lenders more nervous than a set stable monthly loan that is getting smaller every month.

[eliot]

As others have stated - they focus on affordability. It’s a drains up experience, sky, phones, gym, kids etc etc
My LTV was less than 50% and they still wanted inside leg measurements (mainly as i’m the main earner with dependants) despite a very very good credit score.
Paying of the CC seems the most sensible step, followed by the loan.

[putonghua73]

What return are you getting on your savings?
What is the APR rate for your various loans?

When APR rate > savings rate, use savings to pay off highest APR loan. I would definitely close all unused credit lines.

[Gareth79]

Greshamst said:

Keep one or two of your highest limit credit cards, close the rest. Make sure your 0% card is t using over 75% of the available credit limit.

Always leave the OLDEST credit card open though. A friend is a credit analyst for a very large card company and apparently it's one of the key indicators when assessing creditworthiness.

[Kent Border Kenny]

Remember, lenders don’t see the score that credit agencies give you, and credit agencies don’t know your salary, so have no idea of affordability.

[Killer2005]

A few things
1. Your credit card may be 0% but the lenders stress it higher, around 3%
2. Your credit score will be different from the lenders as they use their own internal credit score.
3. Careful running credit checks on yourself as they potentially could affect credit score the lender. Similarly checking anything on comparison websites could also affect your score.
4. Get yourself on the electoral roll, can also affect your score and make things easier.

[anonymous-user]

Gareth79 said:

Always leave the OLDEST credit card open though. A friend is a credit analyst for a very large card company and apparently it's one of the key indicators when assessing creditworthiness.

Just asked my wife this question, as she used to build score cards. She said that generally once the card has been open for more than 12 months, the extra age doesn't make a difference.

[Turn7]

putonghua73 said:

What return are you getting on your savings?

Next to sfa like the rest of us I imagine......

Savings are almost a pointless exercise these days.

[zsdom]

The outstanding arrangements will directly affect a decision in principle, so look clearing these first prioritising the cards over the loans, if you dont want to close any cards look at reducing the limits instead.

Forget clearscore & places like that, lenders mainly use Experian & Equifax, sometimes using Callcredit as an extra, sign up to one of those instead, Experian in brilliant for seeing your score, it also tells you how you can improve your score & what can be dragging it down too

Edited by zsdom on Thursday 26th December 10:14

[nikaiyo2]

V8 Stang said:

I really want to get myself a mortgage, rather than paying a large amount of money a month on rent.

Now due to being a bit foolish a few years ago I do have a loan (around £6000 remaining) and around £5000 on credit card (but at 0% apr).

Also have a PCP on my car, which clear score shows as a £30,000 loan!

Ive done a credit check on clear score, and im getting 462, which it seems is not the best? But ive not had any missed payments etc.

So would prefer to improve this if possible.

I notice I actually have a combined credit card limit of £49,000! is this bad?, and would I be best to close unused accounts to bring this down?

I have enough savings to pay off either the loan or credit card (whilst still leaving a house deposit). Am I better off clearing either the loan or credit card?


I would be looking for a mortgage on my own, on a £40K salary, and looking to borrow around £170K.


Anyone any advice to put myself in the best position?

Cheers

462 on ClearScore is considered “good”... 466 is excellent so I can’t imagine your score will set of alarms!

I bet if you look on one of the others like money saving expert experian it will be much better...

The number that these sites show is pretty meaningless, the lenders don’t see it, it just gets people looking at the site and allows the agency to push people towards loans and other products they earn commission from!
I would only look at the credit score sites in any kind of detail if a mortgage advisor said there was an issue with credit worthiness and then only to track/ find out what it was.

I am not saying these sites are up to no good or anything, just that their importance is over rated!

[Sarnie]

nikaiyo2 said:

just that their importance is over rated!

^This