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    • Sponge_Cake
    • By Sponge_Cake 12th Jun 17, 4:30 PM
    • 46Posts
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    Sponge_Cake
    I've checked out my credit score on experian
    • #1
    • 12th Jun 17, 4:30 PM
    I've checked out my credit score on experian 12th Jun 17 at 4:30 PM
    It came up as 940.

    I'm assuming this is a good score, I'm very interested in getting a mortgage in the very near future so it's important I know how well I am scoring.
Page 1
    • zx81
    • By zx81 12th Jun 17, 4:32 PM
    • 12,571 Posts
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    zx81
    • #2
    • 12th Jun 17, 4:32 PM
    • #2
    • 12th Jun 17, 4:32 PM
    It's irrelevant.

    What actual data do your files show? What accounts do you have, payment history etc? How does your income compare to your desired property?
    • Pixie5740
    • By Pixie5740 12th Jun 17, 7:04 PM
    • 10,650 Posts
    • 14,638 Thanks
    Pixie5740
    • #3
    • 12th Jun 17, 7:04 PM
    • #3
    • 12th Jun 17, 7:04 PM
    From the thread at the top of the board.

    on what your credit score really means

    By Martin | Edited by Johanna




    If you've paid to get a credit score from one of the credit agencies, how reliable is it? We run through the truth about credit scores.

    I’ve just found out that my credit score has dropped – should I be worried? Right, hold on there for a second. Actually, you don't have a credit score in the UK, you don’t have a credit rating, and there’s no such thing as a credit blacklist.
    So, when you say your credit score has dropped – what exactly do you mean by that?

    Well, I paid a credit reference agency to check my credit score and it's dropped. OK. So you went to one of the credit agencies – Equifax, Experian and Callcredit – and paid them a sum to get your 'credit score'. You'll get a score up to 600 from Equifax, up to 999 from Experian and up to five from Callcredit.

    That's very common, and it's common to be confused about exactly what this is.

    So I do get a score, but it's worthless? What you have to understand is this score doesn’t really mean that much. The first thing you need to appreciate is when you apply to a lender is that it will judge you based on three criteria.

    Firstly, your application form details (which the credit reference agencies don’t have). Secondly, any past dealings you’ve had with that lender (which the credit reference agencies might not know). And thirdly, the information contained in your credit reference files (which the credit rating agencies do know).

    So, the first thing to understand is that this score is based on incomplete information. The next thing to understand is different lenders are looking for different things, so they score you differently.

    Just because one lender rejects you doesn’t mean another lender will do the same. The idea that this is all based on some simple score given to you by one of the credit reference agencies is false. At best, it's just an indicative guide to roughly how good or bad a risk you are.

    In that case – why do they sell it to me? Well, the key word in what you’ve just said is ‘sell’. They sell it to you. Credit reference agencies used to make all their money from selling data to lenders. The idea was to help lenders predict your behaviour, which allowed them to assess whether or not you were a good person to lend to. They do that by deciding not just if you are a good or bad risk, but if you will be profitable or not.

    Then some bright spark at the credit reference agencies realised they could generate a business called 'credit management'. It meant they could start to sell you all the other sorts of data and monitoring products for the first time and start making money from it. You ask why they sell it to you – well, it makes them money.

    More 60 seconds
    The 5% savings loophole
    Using credit cards abroad

    Does that mean it’s completely worthless and I should ignore it? No, I wouldn’t go that far. It's a loose indication of your rough creditworthiness, and certainly it's worth looking at the things they say are blemishes to see what you can do to improve your credit.
    Where I think scoring doesn’t work is, for example, imagine you closed a credit card with a high credit limit that you'd had a long time, but didn't use any more. It's perfectly possible that your score would drop because a long relationship means it's a credit card that could give a good prediction of your behaviour.

    But it also needs to be understood closing this would count as a positive for some lenders because you had less available credit.
    The fact that your credit scorer has decided to reduce the score it gives you because you've cancelled that card doesn’t mean other lenders will do the same. Nor does it mean there's anything wrong.

    OK – right, I understand. So what should I do to improve my credit? Well, it's important to think of this like a beauty parade. Just as everybody finds different people attractive – so do lenders.

    There are general things you can do to 'rouge' up your credit appearance that make sense everywhere. As this guide's only 60 seconds long, I'm not going to go into that here. Instead, read the full Credit Scores guide.

    It's very important to understand – this is art, not science.

    What works for one lender won’t necessarily work for another – so there's no tried and tested right answer.
    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.
    • Fireflyaway
    • By Fireflyaway 14th Jun 17, 7:30 AM
    • 1,037 Posts
    • 1,040 Thanks
    Fireflyaway
    • #4
    • 14th Jun 17, 7:30 AM
    • #4
    • 14th Jun 17, 7:30 AM
    I'm like you. Of the mindset that like it or not, credit scores mean something or they wouldn't exist. Someone with a low score is more unlikely to get a mortgage than someone with a high score. I know there are other factors.
    Come on here and the same old people will tell you its useless and meaningless.....
    I'd go and see a mortgage advisor.
    • zx81
    • By zx81 14th Jun 17, 7:58 AM
    • 12,571 Posts
    • 12,746 Thanks
    zx81
    • #5
    • 14th Jun 17, 7:58 AM
    • #5
    • 14th Jun 17, 7:58 AM

    Come on here and the same old people will tell you its useless and meaningless.....
    Originally posted by Fireflyaway
    That's because, like it or not, the same old fact remains true.
    • glentoran99
    • By glentoran99 14th Jun 17, 8:02 AM
    • 4,291 Posts
    • 3,248 Thanks
    glentoran99
    • #6
    • 14th Jun 17, 8:02 AM
    • #6
    • 14th Jun 17, 8:02 AM
    I'm like you. Of the mindset that like it or not, credit scores mean something or they wouldn't exist. Someone with a low score is more unlikely to get a mortgage than someone with a high score. I know there are other factors.
    Come on here and the same old people will tell you its useless and meaningless.....
    I'd go and see a mortgage advisor.
    Originally posted by Fireflyaway


    See you would be right, If mortgage lenders saw the score.


    They don't however they do perform their own "credit score"
    • B_G_B
    • By B_G_B 14th Jun 17, 9:58 AM
    • 376 Posts
    • 377 Thanks
    B_G_B
    • #7
    • 14th Jun 17, 9:58 AM
    • #7
    • 14th Jun 17, 9:58 AM
    I'm like you. Of the mindset that like it or not, credit scores mean something or they wouldn't exist.
    Originally posted by Fireflyaway
    Of course they mean something. They help with the credit worthiness of the credit reference agencies.
    • Candyapple
    • By Candyapple 14th Jun 17, 10:26 AM
    • 2,191 Posts
    • 1,674 Thanks
    Candyapple
    • #8
    • 14th Jun 17, 10:26 AM
    • #8
    • 14th Jun 17, 10:26 AM
    I'm like you. Of the mindset that like it or not, credit scores mean something or they wouldn't exist. Someone with a low score is more unlikely to get a mortgage than someone with a high score. I know there are other factors.
    Come on here and the same old people will tell you its useless and meaningless.....
    I'd go and see a mortgage advisor.
    Originally posted by Fireflyaway
    Please read this thread, post #10 onwards:
    http://forums.moneysavingexpert.com/showthread.php?t=5663181

    Also, as for your comment about low score vs high score and not getting a mortgage, here's 2 mortgage advisors saying to ignore credit scores:
    http://forums.moneysavingexpert.com/showthread.php?t=5659874

    And there was another thread last month (or possibly April) where someone reported back that despite having a 2/5 rating on Noddle they managed to get a mortgage (will see if I can find the thread).

    The scores exist to make the CRAs money. They are a marketing tool because they know the general public like to see they would score highly and so when the scores drop and people panic as if their lives are over, you see the desperate pleas of help threads on here as to why their score has dropped and what can they do to get it back up / or they've got the best score rating and yet applied for a phone contract and were declined and don't know why.

    It's good that the general public now has access to their 3 credit files for free (should have happened many years ago but oh well) but the sooner they all get rid of their stupid scores, the better. Far better to show the report and point out areas that could be bettered. Perhaps a checklist like below with yes/no options beside them which you could print out at the end to work out possible areas you can improve on:

    Are you on the electoral roll?
    Lenders like to see address stability and this is also an easy way of electronically confirming your identity.

    Do you have a history of late payments?
    Try and make your payments on time as lenders like to see that people can handle credit responsibly. Set up a direct debit if you are not disciplined enough to remember to make manual payments, this can also prevent payments being missed if you are ill or on holiday.
    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
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