A heads up if you're precious about your credit rating, I'm not particularly but I was surprised to get an email to say that there had been activity that had reduced mine. The only thing I could think of was recently making the last payment on our mortgage, I had rather expected my rating to go up but no, i've logged into checkmyfile and there's a 40 point dent in it.
So if you *are* precious, stretch that mortgage out and treat yourself!
My credit rating dropped when I stopped work.
Money still goes into my bank account, I still spend on CC (and have for the past 40 years paid each month in full), My bills get paid mostly by DD or standing order etc.
Very similar here. It had never occurred to me that our creditworthiness would be adversely affected by retirement and extinction of the mortgage.
The only "borrowing" we now ever do is via credit cards, American Express and Visa (the latter only used at business which don't accept Amex), both paid off each month.
Last year, I had upcoming reason to pay a $10,000+ bill while in the USA. I had asked Amex to increase my card credit limit and they increased it to the £20,000 I asked for, without hesitation. We also have a substantial credit limit on Visa (though only ever used it in the USA once - I couldn't quite believe that there was a business there which wouldn't take Amex) and a decent-sized overdraft limit.
Yesterday evening, at a charity event we attended, I had to take cash with me (admission, raffle tickets, etc). I luckily had £15 in my wallet. Can't remember how long it had been there. It's so liberating to be able to go out and about with just a Visa card in my pocket (bars and pubs hardly ever accept Amex).
risk of death
credit companies use scoring to effectively promote credit.
Ah...
That shouldn't affect the credit rating. For many of us there will be enough in the estate to clear any debts, especially if it includes property.
It does seem rather silly, as a) you've shown you can pay off a big, long-term debt and b) for the first time in your life, you have a guaranteed income, rather than a salary that could end suddenly.
It makes sense to me. Credit records are in favour of the *lender*, not you. The score number that credit reference agencies sell you is a fiction: each lender makes its own decisions based on their own criteria.
What a lender wants is someone to make a profit out of. Somebody who takes out a 0% card and always pays on time makes them barely any profit. Somebody who pays late all the time and racks up lots of fees is nicely profitable (unless they default).
Different lenders target different markets. If your income goes down (at retirement), the amount you're likely to spend on cards goes down too, and so does the merchant fees. If you pay off your mortgage you might have more disposable income (which might be good) but you also stop demonstrating your ability to make monthly payments reliably, which could make your risk of default go up.
This is not your Captain Mainwaring bank-manager credit check, it's them sizing up will-they-make-us-loadsamoney. They are not the same.
MSE has more:
Not to me.
They are in fact supposed to indicate how risky it is to lend to that individual, not 'in favour' of anyone.
Particularly with individuals who do not receive a lump sum when they retire, you can certainly make a case that the individual is more risky when they move to a pension which pays less than the salary did before they retired.
But those criteria should be a measure of risk.
That isn't what a credit rating is about. If it was, those with lots of debt that they are likely to be able to cover given their income, would have a higher credit rating than those who save or invest much more of their income and that isn't so.
But is a very good credit risk. A much better one that someone who has maxed out all their cards which charge high rates of interest on the amount owed.
But are much more likely to default. And that's what a credit rating is about, the risk of them defaulting.
And usually sees those charged a higher interest rate to cover the much higher risk of a default or not get as high a credit limit on their card or be refused a new card.
Not necessarily if you have been saving and investing at a high rate before retirement so you are sure of being able to retain a high standard of living when retired.
No might have about it, of course you do when you don't have to make mortgage payments anymore.
Not if you keep paying off your credit card in full every month.
Not when your outgoings have dropped dramatically when you no longer have to pay the mortgage premiums.
That isn't what a credit rating is about.
Fraid so.
That mangles the real story utterly.
Jock used his keyboard to write :
Credit limit is also dependent on how much use you make of the card. Mine has a fairly low limit on it, because I never spend large sums on it over each month, often I don't use it at all and always it is repaid in full at the month end automatically.
...but will surely have a lower (worse) credit rating?
Once the mortgage is paid off the lenders have no record of who owns the property, or hold over it. It could have been passed on to avoid future death duties. The person who has died may have insufficient or indeed no assets and so their debts die with them. That is why their credit rating falls.
There Is No Such Thing As Credit Rating.
Your credit file shows what credit facilities you have or have recently had, and month by month how much is owed, the repayments on them and whether they are up to date or in arrears (and how many months in arrears), including missed payments etc.
From this a lender can make a decision about whether you're worth lending to. Like insurance companies, they're using this information to size you up and decide if you're going to be profitable for them, which depends on their business model. A payday loans lender is going to make quite a different judgement from a yacht financing business. Just like a 'young driver' and a 'classic car' insurer are going to look at you very differently.
This is why the 'credit score' number is meaningless, because it's up to the lender who they want to lend to, and those criteria may not agree with the people touting you the number.
Theo
As do I, but I ran into a major problem once when trying to spend almost to the limit on a single item. It was flagged as "unusual activity" and my card was not accepted. It took over an hour and a visit to a - thankfully - nearby branch of the bank to sort out. It would probably have been easier abroad as I'd have had a passport with me, but being on holiday in the UK trying to prove my identity was not that easy (this was before the days of driving licences with photos) .
It probably doesn't make too much difference. If you want to boost your credit rating again just buy something on a zero interest credit deal.
BTW once your mortgage is paid off it is worth checking that the online Land Registry entry for your property is correct and asking them to notify you of any attempts to alter it. Whilst you have a mortgage the lender keeps an eye on this for you since they don't want the property which is their security to be stolen and "sold" by conmen.
Wrong.
Duh.
Irrelevant to the credit rating of the individual who had it mortgaged.
The mortgager would know if that had occurred.
Interesting.... The shit you've to worry about! I might remortgage it and buy the campervan that I want :)
Just sign up for the alert service they provide. They will send you an email if there is any action on the properties you have or are monitoring
I had been meaning to take a look, Is is that simple? Great, thanks.
Out of the blue - I received an email today with the subject
"HM Land Registry Property Alert Activity Update"
On opening it and suspecting something amiss I find
"There have been no alert notifications issued on this property."
It also contains a mission statement
HM Land Registry?s ambition is to become the world?s leading land registry for speed, simplicity and an open approach to data. Our mission is: ?Your land and property rights: guaranteed and protected?.
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