Credit Score Affected - A Cautionary Tale
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JRP1414
Posts: 31 Forumite
Hi
I just wanted to share with you all my story, as a bit of a warning to others who may be in the same situation.
My Experian credit score has always been near-perfect; well within the top 900s. I pay everything on time, I'm on the electoral roll, have a mortgage, etc.
Recently, I inherited a sum of money from my grandparents. Nothing major, but enough to want to do something wisely with it. I was in the process of remortgaging to get a better rate, so used most of it to pay off a chunk of my mortgage and get an even better rate. For the remainder, I looked into savings accounts, but as I'm sure you will be aware, the interest rates at the moment are virtually non-existent.
Consequently, I followed advice on MSE to look at higher interest paying current accounts. I opened 3 accounts in order to spread the money and get the best returns.
However, I've just received my latest MSE Credit Club Experian score and can see that it has plumetted from 998 last period to low 800s this period. Consequently, it has gone from 'Excellent' to 'Fair'.
When I've looked at why this is, I can see that it's because on paper, I've applied for 4 credit products in a short space of time - the mortgage and the three current accounts.
I guess that even though the three current accounts actually have a positive balance and I won't be using the overdraft facility, it appears to other lenders that I'm desperate for credit.
I don't know whether I can do anything to rectify this. I know some people say the credit score is meaningless, but it's clear to me that Experian must consider it important, else they wouldn't publish it and neither would MSE Credit Club.
Anyway, just a warning to others who may be wanting to use high interest current accounts to invest their money. Perhaps space out applications a little to avoid it appearing as though you are in a financial crisis!
I just wanted to share with you all my story, as a bit of a warning to others who may be in the same situation.
My Experian credit score has always been near-perfect; well within the top 900s. I pay everything on time, I'm on the electoral roll, have a mortgage, etc.
Recently, I inherited a sum of money from my grandparents. Nothing major, but enough to want to do something wisely with it. I was in the process of remortgaging to get a better rate, so used most of it to pay off a chunk of my mortgage and get an even better rate. For the remainder, I looked into savings accounts, but as I'm sure you will be aware, the interest rates at the moment are virtually non-existent.
Consequently, I followed advice on MSE to look at higher interest paying current accounts. I opened 3 accounts in order to spread the money and get the best returns.
However, I've just received my latest MSE Credit Club Experian score and can see that it has plumetted from 998 last period to low 800s this period. Consequently, it has gone from 'Excellent' to 'Fair'.
When I've looked at why this is, I can see that it's because on paper, I've applied for 4 credit products in a short space of time - the mortgage and the three current accounts.
I guess that even though the three current accounts actually have a positive balance and I won't be using the overdraft facility, it appears to other lenders that I'm desperate for credit.
I don't know whether I can do anything to rectify this. I know some people say the credit score is meaningless, but it's clear to me that Experian must consider it important, else they wouldn't publish it and neither would MSE Credit Club.
Anyway, just a warning to others who may be wanting to use high interest current accounts to invest their money. Perhaps space out applications a little to avoid it appearing as though you are in a financial crisis!
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Comments
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I know some people say the credit score is meaningless, but it's clear to me that Experian must consider it important, else they wouldn't publish it and neither would MSE Credit Club.
It's clear that both Experian and MSE consider it a profitable gimmick to keep customers interested in their respective products.
Just because something is published does not make it valuable. Are you aware of the works of the popular pop combo One Direction?
Only your credit file is of value. Fortunately for you, this means there is nothing to rectify.0 -
:rotfl:
Well that explains it. I did wonder why it had dropped so much, but now I understand.
Disappointing that it's promoted as something worth taking note of.
Thank you for the advice.0 -
A cautionary tale indeed.
Your credit score is meaningless, your credit history is not.
At worst, your average account age will have came down, which is an indicator to lenders but of little harm.
However, you've already demonstrated that your credit score didn't change your outcome of getting a better mortgage rate, which is more important than what Experian rate you as.
You'll notice after a few months your score will go back up, despite you not doing anything.
In debt and looking for help? Look here for the MSE Debt Help Guide.
Also, If you need any free and impartial debt advice, the National Debtline, Stepchange, and the CAB can help.0 -
Nothing new to spread applications out.
How do Noddle and clear score rate you, not as good I bet.
Not everyone will use Experian nor will they use all 3 agencies.0 -
Deleted_User wrote: »It's clear that both Experian and MSE consider it a profitable gimmick to keep customers interested in their respective products.
Just because something is published does not make it valuable. Are you aware of the works of the popular pop combo One Direction?
Only your credit file is of value. Fortunately for you, this means there is nothing to rectify.
It really is a disappointment that there isn't a pop up for new members explaining that your Experian etc credit score is pointless.. It would save so many posts.0 -
I just love good cautionary tale but not this one.0
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..When I've looked at why this is, I can see that it's because on paper, I've applied for 4 credit products in a short space of time - the mortgage and the three current accounts...
A current account is not a credit product. Unless (of course) you also apply for an overdraft. Which is optional, you know.
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Hi
I know some people say the credit score is meaningless, but it's clear to me that Experian must consider it important, else they wouldn't publish it and neither would MSE Credit Club.
They publish it because you used to have to pay to get it. Before most people were on the internet and forums like this popped up people paid for it and assumed a high score was the important factor.
When they had a good score and got rejected for loans etc then were puzzled and had nowhere to turn to.
Its like people buying SIM cards on ebay, when you can get them for free. Why do people do that? Because they dont know you can get them for free?Censorship Reigns Supreme in Troll City...0
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