lump sum payment to PCP to improve credit rating?

[bcadou]

Hello

I owe approximately 50k on a PCP contract (25k to be paid over 4 years + 25k baloon).

I am in the process of buying a new house, so I am checking my credit score to get the best mortgage possible. My score took a big dent since I took this PCP deal in December 2020. According to my credit report, the only negative factor is this 50k debt I have.

If I make a lump sum payment of 10k or 25k for example, should my credit score noticeably improve?

thank you

Ben

[rossub]

Might make it worse.

I paid a loan off early last year and my rating went down! I expect it’s because the bank didn’t get its full take of interest.

[Defcon5]

Sarnie usually says they only care about the monthly payment IIRC

[anonymous-user]

Defcon5 said:

Sarnie usually says they only care about the monthly payment IIRC

Exactly this, they will multiply the monthly payment by 12 and take this off your annual salary for the mortgage multiplier.

[bcadou]

Oh wow ok thanks guys.

Btw, what does “sarnies” mean? I googled and only found “sandwiches” as a possible meaning lol

[Sir_Dave]

"Sarnie" = PH's resident mortgage broker: https://www.pistonheads.com/gassing/profile.asp?h=...

[bcadou]

Thank you, Sir Dave

[Big Pants]

Sarnie is a Mortgage broker who also posts on this site.

He's also brilliant, honest, swift and straightforward (and he'll be getting a call from me in autumn as my 5 year fix draws towards its end).

[bcadou]

thank you all, will get in touch with Sarnie

[Sarnie]

Just caught up, flat out currently!

OP, I have replied to your mail!

The credit file/score given to you by credit reference agencies is different to the scorecard assessment that lenders go through when assessing your application.

In the main, lenders are not interested in the total owed, it's how much impact the debt has on your monthly disposable income and therefore your ability to maintain their mortgage......

[bcadou]

Thank you very much

[Sarnie]

PS: thanks for the positive response also!