Martin Lewis discussed credit scores, the “myths” people commonly believe about them, and what it takes to keep yours healthy.

Martin Lewis has issued a stark warning to bank customers on his latest ITV show. On the show, he discussed credit scores and debunked some of the “myths” that people commonly believe about them. An audience member named Suzanne posed a question to Martin, asking: “What is the most important factor in determining your credit score? ” The 52-year-old financial guru left viewers stunned when he declared: “You don’t have a credit score. You don’t have one.” He went on to explain that: “There is no single number that dictates if a lender will accept you. Each individual lender scores you differently based on its own wish list of what is a profitable customer. The credit reference agencies market a credit scoring tool but it is just their idea, a rough example, of how a typical lender may look at you. It isn’t rock solid, it isn’t official.”

Martin then explained that people have become ‘overly trapped’ within the confines of their credit score when, in reality, just ‘one factor’ determines an acceptance decision. “Do not sweat small changes in your credit score – it is just an indicator, it isn’t real,” he advised, reports Birmingham Live.

He emphasised that your credit file, also known as a credit report, ‘really does matter’ and urged people to go through this ‘line by line’ annually. He warned: “Even small errors can lead to rejection. I’m talking about an old mobile phone contract that is closed but it is linked to the wrong address – that could cost you a mortgage deal.”

“Lenders do like some debt. They like to see that you’re using it and they like some data on you,” he explained. “So if you have a debt ratio of under one percent, that can actually be negative, especially if you have very few debt products. One way round this is you get yourself a cashback credit card that you are spending every month but you’re paying off in full.”

He continued by explaining another measure lenders look at credit utilisation or the amount of available credit used, adding: “High credit utilisation and low debt ratio isn’t a big deal. But high credit utilisation, using 90 per cent of your available credit, and you’ve got a big debt ratio, that’s when it is really a problem.”

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