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  • FIRST POST
    • Jimmy_Boy
    • By Jimmy_Boy 9th Jun 17, 2:52 PM
    • 17Posts
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    Jimmy_Boy
    Advice from my bank manager has lowered my credit score
    • #1
    • 9th Jun 17, 2:52 PM
    Advice from my bank manager has lowered my credit score 9th Jun 17 at 2:52 PM
    Hi,

    I'm trying to get my credit score healthy in preparation for taking out a loan or mortgage.

    My score with Experian is 999, and my score with ClearScore (which uses Equifax data) was 494 out of 700, and I wanted to try and improve this.

    I had a meeting with my bank manager asking for his professional advice on what steps to take in order to try and improve my Equifax score. He advised that two accounts I have (one, 1 year old, the other 9 years old) are dormant and this would go negatively towards my score so advised me to close them. Based on his advice I gave him the green light to do so.

    Fast forward one month to where this change has gone through the appropriate systems and updated my score, my score has dropped from 494 to 434, with 1 negative (I had no negatives previously) saying my oldest credit account is not very old.

    Looking more closely at the details held for me I notice some issues (which I intended to raise as a dispdute), about the information held about me.

    Under 'Current Accounts' I have 0 entries (used to have 2 before advised to close them). Also have one credit card listed with a limit of £2000, but I reduced the limit to £500 (again on the advice of bank manager), but this is not showing on the ClearScore system.

    So... I suppose my question is, can/should I see if my bank accounts that where closed can be re-opened? and theoretically my score go back up to the 494 (or there abouts) as it was before?

    Secondly, my main current account (which I had the overdraft removed from, again based on advice of bank manager) is not listed. This account is approximately 25 years old and is managed well, but is not going towards my credit score. I THINK I have never had any missed payments on this, but cannot be 100% sure. Should I concentrate on getting this account listed in my credit report and not worry about the other 2 mentioned above?

    Any advice welcome.

    PS. Have about 6 weeks max before I need to make my application for a loan or mortgage.
    Last edited by Jimmy_Boy; 09-06-2017 at 2:54 PM.
Page 1
    • Placitasgirl
    • By Placitasgirl 9th Jun 17, 3:17 PM
    • 195 Posts
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    Placitasgirl
    • #2
    • 9th Jun 17, 3:17 PM
    • #2
    • 9th Jun 17, 3:17 PM
    No, it won't be possible to reopen or resurrect the formally dormant bank accounts now that they have been closed.

    Do also bear in mind that your credit score will have no bearing on your loan or mortgage application; it's a number (some say completely irrelevant) that only you can see.

    What counts when applying for any type of credit is the state of your credit file; so late payment markers, missed payments/defaults etc. Also bear in mind that most of these credit reports run a month behind and changes in personal or financial details are not reflected immediately.
    • Candyapple
    • By Candyapple 9th Jun 17, 3:22 PM
    • 2,170 Posts
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    Candyapple
    • #3
    • 9th Jun 17, 3:22 PM
    • #3
    • 9th Jun 17, 3:22 PM
    Wow, can't believe you were given such advice! I hope you put in a complaint to the branch about this rubbish manager so that he doesn't ruin anyone else's credit history.

    Firstly, credit scores are meaningless, a tool used only by the credit reference agencies as a marketing tactic to get you to buy their premium services. No other company sees them except for you.

    Your 2 accounts that you had would not have been considered as dormant - they would have been active and giving you the green zeroes every month. And why on earth he advised you to reduce your only credit card limit from £2k to £500?? Why??

    You won't be able to re-open the accounts you've closed - they are closed done and dusted. If you wanted to re-open a new account you can do this - however you will be starting from scratch so the history will only be noted from the day the account is opened. Also to be noted that by applying and opening new accounts - your credit score is going to drop even further

    As for your oldest account, you could possibly write to the bank and ask for them to report the data back to the credit reference agencies - however given your short timescale I don't think it will be added on time, let alone make a difference.

    I honestly can't believe you were given such bad advice 6 weeks before a mortgage application. Shocking!

    I would go as far as saying if you are declined for a mortgage, you may want to seek legal advice as to obtaining compensation from the bank for this manager giving you such bad advice that has led to your application being declined because now you will only be seen as having 1 credit account with a dismal £500 limit.
    I'm a Board Guide on the Credit Cards, Loans, Credit Files & Ratings boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com
    • Jimmy_Boy
    • By Jimmy_Boy 9th Jun 17, 3:57 PM
    • 17 Posts
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    Jimmy_Boy
    • #4
    • 9th Jun 17, 3:57 PM
    • #4
    • 9th Jun 17, 3:57 PM
    He advised me to reduce the credit limit on the credit card from £2000 to £500 based on the fact that it looks better to the banks because you are not reliant on a larger amount of credit (words to that effect anyway).

    I'm not too happy to be honest and hope this doesn't go too badly against me, as I was doing well before I took this "professional" advice.

    One further question, is this the start of my credit report on a downward spiral, or has this just been an unfortunate error, and will essentially even itself out now.

    Thanks for your comments.
    • Tarambor
    • By Tarambor 9th Jun 17, 5:46 PM
    • 869 Posts
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    Tarambor
    • #5
    • 9th Jun 17, 5:46 PM
    • #5
    • 9th Jun 17, 5:46 PM
    Its only on a downwards spiral if you:

    a) Get defaults for not paying your bills
    b) Apply for loads of credit in a short period of time
    c) Max out your credit cards and have a high level of borrowing in respect to your income.
    d) Use payday lenders.

    Whatever the stupid number does on the screen on the Equifax, Noddle, Noodle, Clearscore or whatever website does is neither here nor there. The sooner you get it into your head that they're meaningless and it is in fact the contents of the credit file that matter the better off you'll be.
    • Thrugelmir
    • By Thrugelmir 9th Jun 17, 9:01 PM
    • 54,303 Posts
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    Thrugelmir
    • #6
    • 9th Jun 17, 9:01 PM
    • #6
    • 9th Jun 17, 9:01 PM
    All that's happened is that your credit history has been rescored on current activity. The CRA's have no background to the changes. Therefore take a negative outlook. Within a few months your "score" will improve upwards. In addition any Company looking at you record will rate you higher themselves.

    Don't get hung up on immediate changes. Credit history is for the benefit of business not you the consumer.
    “ “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Sir John Marks Templeton
    • Ben8282
    • By Ben8282 10th Jun 17, 3:14 AM
    • 1,944 Posts
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    Ben8282
    • #7
    • 10th Jun 17, 3:14 AM
    • #7
    • 10th Jun 17, 3:14 AM
    You really have been given some odd advice here.
    He advised me to reduce the credit limit on the credit card from £2000 to £500 based on the fact that it looks better to the banks because you are not reliant on a larger amount of credit (words to that effect anyway)..
    Originally posted by Jimmy_Boy
    This is just one example of wrong thinking. How does having a large amount of available credit make you reliant on a large amount of credit? In order to be reliant on a large amount of credit, you would have to be actually using large amounts of credit.
    The thing is, irrespective of the validity or otherwise of what was said to you, a credit limit of £2000 on a credit is not a large amount of credit in any sense. A £2000 credit limit is pretty low on a mainstream card. A £500 credit limit makes it look as if you hold some sort of low limit credit builder card and the lender will not increase it. Furthermore, it will not be apparent from your credit files who reduced this limit; you or the bank. In fact, they would probably think it was the bank as they probably would not imagine anybody would actually reduce their credit limit to £500 for the simple reason that a credit card with a £500 credit limit is not really fit for purpose.
    If the credit limit had been really high, say in excess of 50% of your annual salary, then perhaps an argument could be made in favour of reducing it in case a potential mortgage lender should be concerned that you would suddenly max it out and be unable to meet your mortgage repayments as a result. But a £2000 credit limit is nothing.

    Regarding the current accounts, as you must have seen your credit files prior to obtaining this advice, you surely would have known that the third account was not being reported and that closing the other two would result in no current accounts being shown.

    However, all is not lost. The two current accounts will now be shown as closed accounts which, assuming that they were correctly conducted, will show a stable current account history.

    You start your original post by saying that your Experian score is 999, their maximum, but your Equifax score was significantly lower than the Equifax maximum. Guess what. My Experian score is also 999 and my Equifax score is also significantly lower than the Equifax maximum. Yes, really.
    But do you know what? I couldn't care less. I think I know why though (although of course I could be completely wrong ....). I believe it is because Experian show my quite old mortgage account with a low balance indicative of a very substantial equity. But Equifax don't show the mortgage at all because the lender doesn't report to them. So could the difference in your case be accounted for by something similar? Do the Experian and Equifax reports both show exactly the same set of credit accounts?
    Although the credit scores are in themselves meaningless, the fact that Experian score you 999 is strongly indicative that nothing really untoward such as ccj's, defaults or more than the very occasional late payment will be found in your credit files. To be successful in your mortgage application, you really just need to make sure things stay that way and avoid any large balances; the less debt you have the better.
    Last edited by Ben8282; 10-06-2017 at 3:34 AM.
    • Superscrooge
    • By Superscrooge 10th Jun 17, 12:52 PM
    • 843 Posts
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    Superscrooge
    • #8
    • 10th Jun 17, 12:52 PM
    • #8
    • 10th Jun 17, 12:52 PM
    Does the fact that Experian give you their highest possible score and Equifax give you a low score not indicate how useless these scores are for measuring your credit worthiness?

    Last November one CRA rated me as 'excellent' whilst another rated me as 'poor'. Both held the same information on my credit file.

    Ignore your score. Concentrate on your credit history
    Last edited by Superscrooge; 10-06-2017 at 12:55 PM.
    • Pixie5740
    • By Pixie5740 10th Jun 17, 2:12 PM
    • 10,589 Posts
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    Pixie5740
    • #9
    • 10th Jun 17, 2:12 PM
    • #9
    • 10th Jun 17, 2:12 PM
    Are you planning on applying for a mortgage with Equifax?
    Annual income twenty pounds, annual expenditure nineteen pounds nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds nought and six, result misery.
    • surreysaver
    • By surreysaver 10th Jun 17, 4:31 PM
    • 2,153 Posts
    • 1,218 Thanks
    surreysaver
    Bank Managers don't manage banks, they manage sales. A Bank Manager would be the last person I sought advice about my money from.
    I consider myself to be a male feminist. Is that allowed?
    • Jimmy_Boy
    • By Jimmy_Boy 10th Jun 17, 9:47 PM
    • 17 Posts
    • 4 Thanks
    Jimmy_Boy
    Hi Guys.

    Thanks for the words.

    I am aware that the score is just an indicator, and that different providers will give you different scores, hence Equifax being quite a bit lower. But my thinking was, that score will be based on historical information held against me, different providers using different data / calculations, and a higher score will inherently mean my history looks better when potential lenders look at my credit file, so no harm in trying to focus on getting a higher score, but I take on board what you guys are saying.

    With regards to my 2 current accounts that were closed as advised by bank manager, and the one current account that is not listed, I was hopeful that if I could get my current account that is not listed and 25 years old recognised on my credit file, this would go positively towards me, as currently I essentially have no history of an active current account now and this is going against me. The only 'Active' thing on my file is an 10 month old credit card with a £2000 limit, now reduced to £500.

    Yes, I have looked at my credit report before and did notice my 25 year old current account not listed, but naively didn't put too much weight on it, as my score was pretty good. It was something I intended to address but didn't put it as a high priority. Why? Because I am not 100% sure I have had no missed payments or anything on that account in the past 6 years that would look bad, so thought rather than take a chance and add it to my credit file, only to then realise there were some negative aspects to that account which look bad, best just to leave it.

    I am probably getting more anxious about this whole thing than I ought to be, but as I get older I find I worry more! ha

    To put things into perspective...
    I earn £23k a year, have saved £18k into an ISA in the last 30 months, and am in the process of right to buy from my council. I estimate to be able to purchase my flat in the range of £28k - £34k. With that in mind, I am looking to get a loan of approximately £15k over a 5 year term (will know the finer details when the valuer's valuation paperwork arrives).

    I am actively using my credit card every month to a total of about £50 and pay this in full within 2 days of getting the bill, so hopefully this will look good.

    I suppose my question ultimately now is, should I look at getting my 25 Year old current account added to my credit file in the hope it will be visible by the time I need to make my application, or is it not going to make much difference when a lender is looking at it and just to leave it for the moment.

    Thanks for your advice guys. (Should of asked here first! doh!)
    Last edited by Jimmy_Boy; 10-06-2017 at 9:54 PM.
    • zx81
    • By zx81 10th Jun 17, 10:29 PM
    • 12,449 Posts
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    zx81
    The 25 year old account won't be set up to report.

    It also won't make any difference. It's only a current account.
    • YorkshireBoy
    • By YorkshireBoy 10th Jun 17, 10:44 PM
    • 29,182 Posts
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    YorkshireBoy
    The 25 year old account won't be set up to report.
    Originally posted by zx81
    I think someone reported recently they were able to get their bank to start reporting 'white data' for a pre-1998 current account.
    It also won't make any difference. It's only a current account.
    I agree for a mortgage application (because they'll just ask to see statements and there's far more underwriter involvement), but for a loan or credit card I would have thought it could make a difference...certainly in terms of an auto-accept? Having said that, I seem to remember you work, or did work, in this line of work...so I bow to your insider knowledge.
    • Jimmy_Boy
    • By Jimmy_Boy 10th Jun 17, 11:10 PM
    • 17 Posts
    • 4 Thanks
    Jimmy_Boy
    but for a loan or credit card I would have thought it could make a difference...certainly in terms of an auto-accept?
    Originally posted by YorkshireBoy
    You just reminded me of something which I tried to get an answer to, but was unsuccessful.

    Going back approx. 18 months, I used to have pre-approved loan offers of £27,000. In the past 18 months I have not really paid any attention to that part of my online banking, but when I checked in approx. January, it said there was no pre-approved offers available to me, due to "not knowing enough about my income and expenditure".

    I tried to get an answer last month as to why I did previously had pre-approved offers, but no-longer did, and queried the language used of "not knowing enough about my income and expenditure", but bank manager did not know. Also tried on-line chat, but they also did not know.

    Have just checked now, and for the first time in approx 6 months of checking I now have a pre-approved offer of £10,400.

    Should I read anything into this, or am I making a mountain out of a mole hill?

    Thanks.
    • YorkshireBoy
    • By YorkshireBoy 10th Jun 17, 11:15 PM
    • 29,182 Posts
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    YorkshireBoy
    Going back approx. 18 months, I used to have pre-approved loan offers of £27,000.
    Originally posted by Jimmy_Boy
    So the bank that receives your £23K salary and pays all your bills (and has done for 25 years) knows nothing about your financial circumstances? Very strange. As is the offer of a loan of more than your salary...unless it was much higher then?...say 3 times as high as it is now?
    • Jimmy_Boy
    • By Jimmy_Boy 10th Jun 17, 11:22 PM
    • 17 Posts
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    Jimmy_Boy
    This is what I found so confusing myself, how can they (my bank) not have enough information about me as all my finances are run through them?!

    No, my salary has not changed and I also remember thinking that it was an out-of-balance offer in relation to my salary, i.e. £27,000 seemed like just too much to be offering on a pre-approved loan, but that is what it used to be, have no screenshots of proof unfortunately.
    • Ben8282
    • By Ben8282 11th Jun 17, 4:50 AM
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    Ben8282
    On the subject of old accounts, I have a 30+ year old pre-1988 current account with overdraft facility which is reported normally on my credit files and has been reported for as long as I have been checking my files. I have never taken action to get this account reported.
    I believe it would be beneficial to your credit files to try to get your account reported. The obvious benefits are that the age of the account will both show current account stability over a long period and increase the average age of your accounts which you say is very poor, and also show that you actually have a current account and are trusted with an overdraft facility. As it stands, any potential lender checking your credit files may draw the conclusion that you keep your money under a mattress. The existence of a good overdraft facility, especially if never used, can also give lenders an extra degree of confidence regarding your ability to make on time payments. Does this account actually have an overdraft facility? If it doesn't that is the obvious reason why it is not being reported. Try to get an overdraft facility and it may well start reporting automatically. If you already have an overdraft facility, talk to the bank and see what can be done to get the account reported. I don't quite understand how this new negative concerning the age of your accounts has come about because the closed accounts will not have disappeared from your credit files. They will still be there for the next six years as closed accounts with their ages still showing.
    I find it very strange that your bank was offering you a pre-approved unsecured loan for £27,000. This is a very high amount and somewhat disproportionate to the £2000 credit limit that you had on your one and only credit card. Of course, pre-approved probably means nothing of the sort but still the amount almost defies belief as does your claim that when you logged onto online banking it was actually written there that you were no longer pre-approved for a loan as they did not know enough about your income and expenditure. I have never previously come across an example of a bank stating a reason why a customer was not pre-approved for something.
    As to what you should read into the fact that you now once again have a pre-approved offer, albeit for a lower and far more realistic amount, is perhaps that the bank does now know enough about your income and expenditure. Are you sure this loan is actually pre-approved or does it say you are pre-approved to apply for a loan of up to the amount stated.
    Regarding the current use of your credit card. using the card and repaying in full every month is of course the best thing to do, but there is absolutely no need to repay it two days after the statement date (unless that is convenient for you of course). It would be more normal to set up a direct debit for the full balance and just let it go through on the payment due date. Your credit files will not show the date of payment. I would also suggest, if realistically possible, trying to get the original credit limit reinstated or at least increased to over £1000, preferably more.
    Last edited by Ben8282; 11-06-2017 at 5:36 AM.
    • Jimmy_Boy
    • By Jimmy_Boy 11th Jun 17, 1:15 PM
    • 17 Posts
    • 4 Thanks
    Jimmy_Boy
    My current account DID have an overdraft (of £400) until my bank manager advised me to remove it last month.

    I wish I took a screenshot of the text previously for the pre-approved offers, but it definitely said words to the affect of "Sorry, there are no pre-approved offers due to us not knowing enough about your income and expenditure."

    The offer is under "Pre-selected offers", and this is a copy/paste of the wording now.

    Barclayloan

    You can apply to borrow up to £ 10,400.

    Apply online between 7am and 11pm.


    Apply online
    • Candyapple
    • By Candyapple 12th Jun 17, 10:55 AM
    • 2,170 Posts
    • 1,667 Thanks
    Candyapple
    My current account DID have an overdraft (of £400) until my bank manager advised me to remove it last month.

    I wish I took a screenshot of the text previously for the pre-approved offers, but it definitely said words to the affect of "Sorry, there are no pre-approved offers due to us not knowing enough about your income and expenditure."

    The offer is under "Pre-selected offers", and this is a copy/paste of the wording now.

    Barclayloan

    You can apply to borrow up to £ 10,400.

    Apply online between 7am and 11pm.


    Apply online
    Originally posted by Jimmy_Boy

    Why are you so het up about a potential loan offer which you never took up? It doesn't make one iota of difference.

    Have you put in a complaint about the manager yet?

    Can you come back with an update when you apply for your mortgage please?
    I'm a Board Guide on the Credit Cards, Loans, Credit Files & Ratings boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com
    • Jimmy_Boy
    • By Jimmy_Boy 12th Jun 17, 9:46 PM
    • 17 Posts
    • 4 Thanks
    Jimmy_Boy
    [double post]
    Last edited by Jimmy_Boy; 12-06-2017 at 9:54 PM.
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