credit card

We all know that having debt can make you feel sick to your stomach, and when you finally finish paying off a loan you get this euphoric sense of freedom. So why is it that we can be penalised for paying off our debt and wiping the slate clean?
CSU what is it and how does it affect your credit core?
CSU is all about credit card utilization, it’s seen as a key determinant of your credit worthiness in some people’s eyes, but it’s really not the same when it comes to mortgage lenders.
For example, last year one of MTGE’s members of staff paid back £30k of debt. Closing five accounts. The person made no late or missed payments. His credit score dropped 35 points. Why?
Due to closing down the accounts, the credit score was penalised.
Now, this is where it gets confusing because mortgage lenders will want to see that you do not have large amounts of outstanding debt and can afford to pay back your mortgage loan, but credit card lenders seem to encourage debt gearing and penalise you when you pay it off. So, our advice is to not get so hung up on your credit score it’s purely a guide.
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Article written:  January 17th, 2023

Please be aware the details of this article are appropriate from the time it was written, therefore any information given after this date may have changed.

Be aware that if you are unable to keep up your mortgage repayments you may lose your home.  We are professional mortgage brokers with a joint knowledge of 75 years.  Our advice is free, so if you have any mortgage-related questions feel free to drop us a line at:

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