Credit Scoring explained, and available mortgage and remortgage solutions
Credit Scoring is a sophisticated method employed by some financial institutions in order to determine whether or not they will lend you money.
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Mr G., Oakwood, Derby
Here we explain credit scoring systems and the credit scoring process and how it works, and provide details and information of how we can usually help you with a mortgage or remortgage even if a credit scoring process determines you have a low credit score.
Table of Contents:
Understanding Credit Scoring systems...
So, as we mentioned above, Credit Scoring systems are a sophisticated method that some financial institutions use such as Banks, Mortgage Lenders, and Credit Card companies, so that they can ascertain whether or not they will lend money to you.
Lenders using this method will all have secret credit scoring systems, and will often incorporate information held on the credit register by one of the major Credit Reference Agencies such as Experian or Equifax.
Aspects taken into account during the credit scoring process, and scoring points towards a pass score will typically include:
- Age minus points for 18-21, minus points age 59+
- Income the higher the income, the higher the number of points awarded
- Past Credit History plus points if conducted well
- Bad Credit History minus points, depending on severity - up to 35% of total points
- Type of Employment professional and salaried employees awarded more points
- Stability of Employment minus points for less than 1 year in employment
- Stability of Residence minus points for less than 1 year in residence
- Inclusion on the Electoral Roll large minus points for not being present on the voters roll
- Member of a Pension Scheme higher score if you are in a Pension Scheme
- Existing credit conduct no arrears or late payments scores higher points
- Amount of other credit can be penalised for over-commitment
- Late payments will incur minus points
- Credit Cards other credit facilities usually score higher
- Bank account large minus points for no bank account
- Length of time with bank the longer you have held your bank account, the more points you will score
- Too many credit applications the more applications for credit you have made, the fewer the points!
One of the criticisms of credit scoring systems is that their parameters can be set to decline what would otherwise be considered to be strong applications, and in some instances permit poor cases through the net! Nevertheless, they are able to process high volumes of applications very quickly.
There are advantages in having 'real' people assess applications for finance as opposed to credit scoring, because they can generally "read between the lines", and make appropriate and suitable recommendations for the applications that may be unusual or difficult in one aspect or another.
Do all Lenders use Credit Scoring when assessing circumstances?
No, not at all! Here at Shire Direct, we understand personal circumstances, and have developed a range of schemes to accommodate our customers' requirements - even in the trickiest of circumstances!
Our assessments are not judgemental. All too many people who don't have an acceptable credit score, but do have both the willingness and the ability to repay a mortgage, have the door to borrowing closed on them! Not so at Shire Direct!
We believe we have the skills, the approach and the desire to arrange mortgage and remortgage funding. Our specialist team of underwriters and mortgage advisors have a wealth of experience in carefully assessing your circumstances and providing appropriate advice. You'll find our staff approachable, friendly and helpful.
Hopefully, we've managed to answer your initial questions about Credit Scoring. Naturally, we'd love to help in any way we can. So if you're considering buying a property or remortgaging, or have experienced problems elsewhere, please don't hesitate to call us on our Freephone line 08000 282 281, lines are open seven days a week from 8am until 10pm, or why not enquire online now, its quick and its easy. We assure you of a sympathetic, understanding and non-judgmental welcome and will be delighted to help in any way we can!
The overall cost for comparison is 9.8% APR.
The actual rate available will depend upon your circumstances. Ask for a personalised illustration. APR variable and based on a usual case. Most customers are likely to receive a lower rate or the same rate as our overall cost for comparison rate - learn more about APR.
There are no upfront broker fees.
However, a fee may be charged on successful completion. An indication is that on conforming cases (straightforward applications with no or minimal adverse credit) a fee may be charged of up to 1% of the amount advanced, typically £795 and will depend on your circumstances.
For non-conforming cases (where case research and processing may be more complex due to adverse credit or unusual circumstances), a fee may be charged of up to 3% of the amount advanced, typically £1,995.
THINK CAREFULLY BEFORE
SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED
IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Adding existing debt to your mortgage will increase the repayment term and overall cost.
Are you worried and becoming stressed because you are having problems getting a mortgage or remortgage? Worry and stress no more! Here at Shire Direct we provide tailor made mortgage solutions to suit you, and can usually help with all kinds of circumstances including...
Remember, we're here to help, and would love to hear from you!
Shire Direct and Shire Direct Mortgages are trading styles of Shire Processing Centre Limited which is
Authorised and regulated by the Financial Services Authority in respect of regulated mortgage products and general insurances.
Registered No: 302389. Commercial funding and Secured Loans are not regulated by the FSA.
Licensed Credit Brokers. Consumer Credit Licence Number: 349999.
Shire Processing Centre Limited is registered under the provisions of the Data Protection Act by the Information Commissioners Office: Registration No: Z6795249. Registered in England & Wales. Company number: 2732202. Telephone calls may be recorded for training, monitoring and security purposes. All applicants must be aged 18-years or over.