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The Dark Art of The Credit Score


Credit score

Credit Scoring is a highly emotive subject. Lenders are understandably secretive about how their individual score is made up in order to avoid people learning how to play the system. This also allows them to tweak the score slightly at will, in order to tighten up when they want to lend a bit less, or ease when they want more business through the door.

There have been various rumours for a while that the “dark arts” involved in lenders credit scoring decisions utilises a multitude of different things to assess an applicants’ credit worthiness. For example, Postcode Profiling, whereby where you live and the conduct of people around you in the area may have an effect, may well be one of those tools.

However, there are some simple ways those looking for a mortgage can boost their credit score apart from ensuring that they pay all their credit commitments on time and use a tool such as Credit Expert to monitor their score.

Some problems often arise when there is a lack of information for lenders to base their lending decision on, so if you have never had any credit before or are not registered on the voters roll at your current address then, from a credit perspective, you are invisible. The simple act of making sure you are on the voters roll at your current address makes a big difference.

If you have no credit history at all, it may well work to your advantage to get a credit card, use it a little bit each month and make sure you set up a direct debit to clear the balance on time each month, This will give you “credit footprint” and show that you can borrow money and pay it back on time.

There has also been a lot of talk about the impact of social media and big data and if the information is readily available in the public domain, then some lenders are rumoured to be doing some additional research on people they are about to lend money to. The use of big data is especially important as the shear amount of information now available enables lending institutions to compile this data and predict trends amongst certain types of borrowers. This has always formed a part of a lenders credit score procedure but I suspect it will be utilised by more lenders in the future.

Although nothing has been proven as yet, certainly no lenders have admitted to using social media as a way of assessing whether a prospective borrower is a good or bad risk, I would definitely suggest that those looking at applying for a mortgage are careful about what they put on social media.

Gambling stories, lots of wild nights out and lavish spending boasts should probably be avoided!

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Andrew Montlake

Written by Andrew Montlake

Andrew Montlake, better known as Monty, began his journey with an Hons degree in Economics & Politics before starting in the mortgage industry in February 1994. As a main founder of Coreco in 2009, he successfully grew the brand, marketing, and communications, and was made MD in 2019 focussing on the overall vision, strategy, and culture of the company. As Coreco’s media spokesperson, Andrew can often be seen or heard on TV and radio as well as regularly commenting in the national, local, and trade press. He is the author of this acclaimed Mortgage Blog and is well-known for his social media, podcasts, and public speaking. Andrew is now proud to serve as Chairman of the Association of Mortgage Intermediaries, (AMI) as a cheerleader for the Mortgage Industry as a whole and continues to work at the coal face, writing mortgage business and advising clients.

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