Over-40s with poor credit score could rack up £200,000 bill in extra interest payments | Personal Finance | Finance newsbhunt


Britons with poor credit scores aged over 40 could rack up an extra £197,153 in interest payments by the time they turn 68.

Research from Credit Karma found the biggest additional interest costs come from mortgages, adding £126,429 to this person’s costs. They would also pay an extra £32,175 in car loans, £9,778 in credit cards and £28,771 in unsecured loans.

Akansha Nath, head of Partnerships at Credit Karma UK, said: “Your 40s are an important time to continue building the best financial position possible, considering any future plans you might have, such as buying a house or retiring.

“To do so, it’s important to make every pound count. That’s why having a good credit score is integral to a person’s financial future.

“Our data shows maintaining a good credit score could save hundreds of thousands of pounds on interest – money which could be better spent on life’s many milestones.”

Credit scores are calculated using information in credit reports, such as payment history, credit utilisation and length of credit history.

Groups such as Equifax or TransUnion carry out these checks, to highlight any risks with lending a person money, and with the potential to affect the interest rates they are offered.

Credit Karma provides free credit scores and reports from the three main credit reference agencies. Not agencies will show a person their score or rating – they may charge a fee for this service.

A person’s payment history is usually the key factor in making up their credit score, which is why it’s important for people to stay on top of their loan payments.

The number of mortgages approved for house buyers increased in October compared to the previous month, with 47,400 mortgages approved.

A total of 23,700 remortgaging approvals were recorded in October, up from 20,600 in the previous month, which had been the lowest since 1999.

Jason Tebb, chief executive officer of property platform OnTheMarket.com, said: “With approvals for house purchases, an indicator of future borrowing, picking up in October after September’s dip, it is clear that the pause in interest rate hikes has boosted market stability and buyer confidence.

“Borrowers are daring to believe that base rate may have peaked, giving them a better idea of where they stand and what they can commit to when it comes to a property purchase.

“As lenders continue to reduce mortgage rates, this will further boost affordability.”

For the latest personal finance news, follow us on Twitter at @ExpressMoney_.


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