Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • P.Pea
    • By P.Pea 4th Oct 17, 4:03 PM
    • 7Posts
    • 0Thanks
    P.Pea
    Don't think much of credit ratings!
    • #1
    • 4th Oct 17, 4:03 PM
    Don't think much of credit ratings! 4th Oct 17 at 4:03 PM
    6 months ago I went with the free credit checker Experian. Mine then was 860/1000 my wife's was 930/1000 after a few months of leaving it alone, since then I have applied for nothing. My wife applied for another bank account for transferring on the advice of MSE. Since then my credit rating went down from 860 to 664/1000 my wife's is roughly the same. Being a man who really cannot be bothered because of ill health, I just closed the account and thought "If they can't keep a good account of my details why should I care". Really I don't! But, I am pretty sure that credit agencies have a cross-eyed view of most peoples credit ratings.
    My point is if they are susceptible to infiltration and downright !!!!-ups what is the point. Every time I have asked for credit since 1993 it's always been ridiculous amounts of interest. Somehow I've got by without it. But, still these agencies seem to make a mockery of what is in fact reality.
Page 1
    • zx81
    • By zx81 4th Oct 17, 4:06 PM
    • 14,397 Posts
    • 15,194 Thanks
    zx81
    • #2
    • 4th Oct 17, 4:06 PM
    • #2
    • 4th Oct 17, 4:06 PM
    The credit ratings are fictional. They're just there for entertainment purposes, and for people who like collecting numbers.

    Just focus on the data on your file. It's the only think lenders will see or care about. Not a magic number.

    What errors have Experian made with your details? Raise a dispute if they have it wrong.
    • boo_star
    • By boo_star 4th Oct 17, 7:35 PM
    • 1,329 Posts
    • 677 Thanks
    boo_star
    • #3
    • 4th Oct 17, 7:35 PM
    • #3
    • 4th Oct 17, 7:35 PM
    Every time I have asked for credit since 1993 it's always been ridiculous amounts of interest. Somehow I've got by without it. But, still these agencies seem to make a mockery of what is in fact reality.
    Originally posted by P.Pea
    So your credit history is non-existent then?

    Itís not really surprising that a lender, seeing someone with no credit history, decides theyíre a higher risk and offers credit at a higher rate of interest.

    Unfortunately it seems like your unwillingness to accept a higher rate of interest, at least initially, for nearly a quarter of a century is whatís to blame here, not the CRAs.
    • nic_c
    • By nic_c 4th Oct 17, 8:11 PM
    • 1,125 Posts
    • 640 Thanks
    nic_c
    • #4
    • 4th Oct 17, 8:11 PM
    • #4
    • 4th Oct 17, 8:11 PM
    So your credit history is non-existent then?

    Itís not really surprising that a lender, seeing someone with no credit history, decides theyíre a higher risk and offers credit at a higher rate of interest.

    Unfortunately it seems like your unwillingness to accept a higher rate of interest, at least initially, for nearly a quarter of a century is whatís to blame here, not the CRAs.
    Originally posted by boo_star
    Or they have managed to find a way without relying on credit. People seem to say "Oh you must use credit" or "you need to build a credit history", just in the same way we get people on here asking how to improve their "score", because it's expected.

    If credits not needed, don't get it. If someone can manage to do most things in life without credit, then good on them. I suppose because we see adverts for cheap credit out there people think its easy to get it. Before CRA's people were always assessed for risk when applying for credit and given rates in relation to that. The only difference now is the credit history information is centralised in the CRA's that make it easier foe creditors to make their assessment.
    • boo_star
    • By boo_star 4th Oct 17, 8:58 PM
    • 1,329 Posts
    • 677 Thanks
    boo_star
    • #5
    • 4th Oct 17, 8:58 PM
    • #5
    • 4th Oct 17, 8:58 PM
    Or they have managed to find a way without relying on credit. People seem to say "Oh you must use credit" or "you need to build a credit history", just in the same way we get people on here asking how to improve their "score", because it's expected.

    If credits not needed, don't get it. If someone can manage to do most things in life without credit, then good on them. I suppose because we see adverts for cheap credit out there people think its easy to get it. Before CRA's people were always assessed for risk when applying for credit and given rates in relation to that. The only difference now is the credit history information is centralised in the CRA's that make it easier foe creditors to make their assessment.
    Originally posted by nic_c
    Iím aware the OP has managed to do without credit, they said exactly that.

    But heís complaining about the wrong thing here. Itís not the fault of CRAs that lenders are offering him credit with high interest rates and itís not the fault of the lenders if heís just been declining any credit offered because itís too expensive. A lender isnít going to offer good rates to someone with no history, whether thereís a good reason for that or not.
    • Ebe Scrooge
    • By Ebe Scrooge 4th Oct 17, 9:29 PM
    • 4,016 Posts
    • 3,434 Thanks
    Ebe Scrooge
    • #6
    • 4th Oct 17, 9:29 PM
    • #6
    • 4th Oct 17, 9:29 PM
    6 months ago I went with the free credit checker Experian. Mine then was 860/1000 my wife's was 930/1000 after a few months of leaving it alone, since then I have applied for nothing. My wife applied for another bank account for transferring on the advice of MSE. Since then my credit rating went down from 860 to 664/1000 my wife's is roughly the same. Being a man who really cannot be bothered because of ill health, I just closed the account and thought "If they can't keep a good account of my details why should I care". Really I don't! But, I am pretty sure that credit agencies have a cross-eyed view of most peoples credit ratings.
    My point is if they are susceptible to infiltration and downright !!!!-ups what is the point. Every time I have asked for credit since 1993 it's always been ridiculous amounts of interest. Somehow I've got by without it. But, still these agencies seem to make a mockery of what is in fact reality.
    Originally posted by P.Pea
    OK, to try and reply to your comments. Firstly, the CRAs do provide a valuable service to lenders - they provide a history of your borrowing patterns. So, to a prospective lender, they're going to favour someone who shows a history of responsible borrowing, being able to afford to repay their debts, always paying their dues on time, not over-stretching themselves, not borrowing massive amounts in relation to their salary, not missing payments, not currently owing massive amounts to various lenders ... and a whole host of other things.

    Now, the bone of contention is the "score". This is an arbitrary figure calculated by the CRAs, and in fact cannot be seen by lenders - they can only see the factual content of your history. Anecdotally, the "score" goes down in response to any change in credit status - you win the lottery and pay off your mortgage, your score will decrease. So, ignore your score. But your history is important. Make sure it's factually correct, and raise a dispute with the CRA is it's wrong.

    Aside from that - when used wisely, credit is useful. There are not many folk who can buy a house without a mortgage. Many people take out a personal loan or some sort of finance for a car. A credit card gives you loads of protection when buying goods from Amazon, Joe Bloggs, Kneecap & Son Motor Traders, Monarch Airlines and suchlike. I stress again - used sensibly - a credit card can be a real boon.

    So, don't knock the CRAs ( although, I do detest the adverts I've seen on TV recently that extol you to improve your non-existent "credit score" - time to contact the ASA perhaps ??? ). If you've no need for credit then fine. But if you want credit, and you want to get decent offers, then you do need to build up a solid credit history.
    Last edited by Ebe Scrooge; 04-10-2017 at 9:36 PM.
    I may not know much about art, but I know what I like.
    • P.Pea
    • By P.Pea 23rd Oct 17, 11:50 PM
    • 7 Posts
    • 0 Thanks
    P.Pea
    • #7
    • 23rd Oct 17, 11:50 PM
    • #7
    • 23rd Oct 17, 11:50 PM
    I find all your answers sheepish. Should have a better credit scoring as I have not burdened myself for years with unecessary credit. Just because a person lives within their means makes them a better bet in my eyes. They know how to handle money. Your comments are abusive and unthoughtful. You have no idea who or what I am or represent. You all assume to much, or are just trolls. Simple as that.
    • zx81
    • By zx81 24th Oct 17, 5:10 AM
    • 14,397 Posts
    • 15,194 Thanks
    zx81
    • #8
    • 24th Oct 17, 5:10 AM
    • #8
    • 24th Oct 17, 5:10 AM
    You seem to have ignored the advice that your credit score is fictional. It seems you are just trolling.

    Simple as that.
    • Pixie5740
    • By Pixie5740 24th Oct 17, 6:03 AM
    • 11,202 Posts
    • 15,655 Thanks
    Pixie5740
    • #9
    • 24th Oct 17, 6:03 AM
    • #9
    • 24th Oct 17, 6:03 AM
    I don’t think much of this thread.
    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.
    • Ebe Scrooge
    • By Ebe Scrooge 24th Oct 17, 7:49 AM
    • 4,016 Posts
    • 3,434 Thanks
    Ebe Scrooge
    I find all your answers sheepish. Should have a better credit scoring as I have not burdened myself for years with unecessary credit. Just because a person lives within their means makes them a better bet in my eyes. They know how to handle money. Your comments are abusive and unthoughtful. You have no idea who or what I am or represent. You all assume to much, or are just trolls. Simple as that.
    Originally posted by P.Pea

    I find your reply goatish - i.e. the four-legged mammal which fulfills the dietry requirements of mythical bridge-dwelling Scandinavian creatures.


    You obviously fail to grasp the method by which credit-referencing operates, you also seem to have an aversion to receiving advice and information in relation to the questions you pose.


    I suggest that if you dislike the answers given by knowledgeable people, you simply refrain from asking any further questions. I believe there are a number of search engines available on the internet which will provide definitive answers, should you require any further information.

    I may not know much about art, but I know what I like.
    • EachPenny
    • By EachPenny 24th Oct 17, 9:59 AM
    • 3,319 Posts
    • 6,156 Thanks
    EachPenny
    ....Just because a person lives within their means makes them a better bet in my eyes. They know how to handle money....
    Originally posted by P.Pea
    They may know how to handle money, but it is no indication of whether they can handle debt. 'Debt' is not the same as 'money' - the rules are very different for a start.

    If someone who 'lives within their means' suddenly applies for credit what does that tell a lender? That the applicant has been tempted by a particularly attractive offer, or perhaps because they are having financial problems? Without a credit history the lender will have no idea.

    The person who has lived within their means might be looking for credit because they recently became unemployed and won't be able to meet this month's mortgage payment... would you call them a 'better bet'?

    A good clean credit history should be seen as an asset like any other. Something to be used sparingly, but maintained with care as it is the key to other opportunities and protections.
    "In the future, everyone will be rich for 15 minutes"
    • takman
    • By takman 24th Oct 17, 10:01 AM
    • 2,897 Posts
    • 2,409 Thanks
    takman
    I find all your answers sheepish. Should have a better credit scoring as I have not burdened myself for years with unecessary credit. Just because a person lives within their means makes them a better bet in my eyes. They know how to handle money. Your comments are abusive and unthoughtful. You have no idea who or what I am or represent. You all assume to much, or are just trolls. Simple as that.
    Originally posted by P.Pea
    Not using credit at all doesn't make you better at managing money.

    Using credit to your advantage is the best way to manage money. Anyone can live their live without taking out credit but the people who credit responsibly are much likely to be better off.

    Firstly most people unlikely to be able to buy a house outright and have to rent all your life with nothing to show for all those payments over the year. If you get a mortgage you may pay a little interest but the value of your house will increase over the years and after 25 years you have a house worth more than you paid in total and no more rent.

    Credit cards offer section 75 protection so this protects you when things go wrong, they also offer cashback so you effectively get things cheaper than other people without one, or make money on business expenses. You can also borrow money at 0% interest then keep it in the bank earning interest, so making a profit.

    So it's fine you don't want to use credit and it's good you not in debt but it doesn't mean your way is the best way.
    • Don80
    • By Don80 24th Oct 17, 10:40 AM
    • 208 Posts
    • 83 Thanks
    Don80
    I find all your answers sheepish. Should have a better credit scoring as I have not burdened myself for years with unecessary credit. Just because a person lives within their means makes them a better bet in my eyes. They know how to handle money. Your comments are abusive and unthoughtful. You have no idea who or what I am or represent. You all assume to much, or are just trolls. Simple as that.
    Originally posted by P.Pea
    There's no need to be rude, the answers you got are actually good and helpful, if you take the time to read them.

    "A better bet in your eyes" - banks are not assessing what is a good bet in your eyes. They are assessing how much of a risk you are to them. The only way they have to do that is to look at how you managed credit in the past. If they can't assess that then you are a higher risk because they just don't know. That's the point.

    Think of it like this: if your best friend asked for a loan of £500 would you agree? Likely you would consider not just whether you have the money, but your friend's circumstances. Is he responsible? How likely is he to pay you back? That's a bit like what CRA's are used for - to provide that information. Your position is more akin to a stranger on the street asking you for a loan of £500, you don't know them from Adam so you'd say no. That's what having no credit history is like to a bank.

    My suggestion would be to take out a credit card at whatever APR, manage it well, and have a look again in 6 months and you will see you have better options, because by then you will have a history.
    • cjmillsnun
    • By cjmillsnun 24th Oct 17, 6:36 PM
    • 353 Posts
    • 225 Thanks
    cjmillsnun
    OP I think this guide by Martin is what you need to read. Particularly note this passage
    While a poor history counts against you, so does having little credit history as it makes predictions less certain.
    • chappers
    • By chappers 25th Oct 17, 7:46 AM
    • 2,956 Posts
    • 1,703 Thanks
    chappers
    I don't get the concern, if you have managed without credit and don't want any, why are you a) concerned about your file b) even more concerned about a fictional number.
    I haven't taken any unsecured credit for over 20 years, nor do I intend to in the future and as a result don't really care about my credit file and certainly don't care about my score, as long as it's clean so I have the freedom to manage my secured lending.
    • P.Pea
    • By P.Pea 31st Oct 17, 6:07 AM
    • 7 Posts
    • 0 Thanks
    P.Pea
    Thanks to EachPenny, takman, cjmillsnun for unbiased, quantitative answers. All the rest were biased. You all missed the point. I had 860 one month then 5 months later ish 664 having made no changes. Pretty difficult living with something that changes 20% for making no changes. Can be quite depressing for some. In fact don't bother is my estimation. We never had it in the 70's and as far as I can make out it has made money lending a big business for the sharks. Legitimate thievery is what I would call it. The poorest pay the most..Yeah great idea!
    • zx81
    • By zx81 31st Oct 17, 6:43 AM
    • 14,397 Posts
    • 15,194 Thanks
    zx81
    You all missed the point. I had 860 one month then 5 months later ish 664 having made no changes. Pretty difficult living with something that changes 20% for making no changes.
    Originally posted by P.Pea
    You are still missing the point.

    It should be no more difficult to live with than hearing that unicorns are less popular than they used to be, for no reason.
    • Pixie5740
    • By Pixie5740 31st Oct 17, 7:01 AM
    • 11,202 Posts
    • 15,655 Thanks
    Pixie5740
    If you're going to get depressed over a marketing tool (your Experian credit score) then you might want to consider visiting your GP. Someone is missing the point and it's not us. You have been repeatedly told on this thread no lender can see never mind use your Experian credit score and since Experian don't lend money who gives a flying fig whether they rate you as good, bad or indifferent. Something you would have known if you took the time to read the very first thread on this board.

    https://www.moneysavingexpert.com/loans/credit-rating-credit-score

    FYI the modern day credit reference agencies started in the 1970s.
    Last edited by Pixie5740; 31-10-2017 at 7:11 AM.
    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.
    • Gary_Dexter
    • By Gary_Dexter 31st Oct 17, 9:29 AM
    • 186 Posts
    • 108 Thanks
    Gary_Dexter
    Thanks to EachPenny, takman, cjmillsnun for unbiased, quantitative answers. All the rest were biased. You all missed the point. I had 860 one month then 5 months later ish 664 having made no changes. Pretty difficult living with something that changes 20% for making no changes. Can be quite depressing for some. In fact don't bother is my estimation. We never had it in the 70's and as far as I can make out it has made money lending a big business for the sharks. Legitimate thievery is what I would call it. The poorest pay the most..Yeah great idea!
    Originally posted by P.Pea
    The wind must have changed direction too much or there was a different phase of the moon that month.

    The score is entirely fictitious and needs to be ignored since no one sees it (and frets over it!!) but you.

    Something must have changed on your files though - credit balance, overdraft, search on your account...

    If you're that worried query it with the CRA - but be prepared for them to upsell you their monthly chargeable packages
    • Tarambor
    • By Tarambor 1st Nov 17, 11:50 AM
    • 1,756 Posts
    • 1,204 Thanks
    Tarambor
    The poorest pay the most..Yeah great idea!
    Originally posted by P.Pea
    It has nothing to do with being poor and everything to do with being a higher risk. If you are poor you are more likely to default so the interest rate reflects that. Subprime payday loans with four figure interest rates have interest rates that high because of the high number of defaults and that interest rate needs to be that high to ensure that the lender actually makes some money. Everyone else who borrows from a sub-prime effectively pays to cover those who don't repay.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

1,197Posts Today

5,804Users online

Martin's Twitter
  • RT @efitzpat: Thank you SO SO much @MartinSLewis for your Student Loans refund advice! I just got a grand refunded right before Xmas! Whoop?

  • Have a lovely weekend folks. Don't do anything (fiscally) that I wouldn't do!

  • RT @thismorning: With his last deals of the year, @MartinSLewis wishes us all a 'very merry Christmas, a happy Hanukkah and a wonderful and?

  • Follow Martin