📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Credit Rating: How it works and How to improve it discussion area

Options
1118119121123124263

Comments

  • Hey pennyfarthing, there could be many factors affecting your score.

    Experians score is based on much more than just payments being made on time. Applications in the last few month have an impact and can really add up. Three or four in the last couple of months can knock a couple hundred off easily.
    Your total debt balance, and what percentage of credit card limits are being used can also affect it a lot.

    As for the number of accounts, the report summary adds up the active and settled accounts on the report, so I'm wondering if you have 17 accounts on there that are closed?
  • I've got a problem and not sure how to deal with it.
    I have two current accounts, two credit cards (both from Lloyds TSB) for over 3 years now. I am on the electoral roll and I was trying to build up my credit history. I never missed a payment. Recently I got refused for mortgage. Then I checked my credit history at Experian and found out that they don't have any data on me (i.e. it doesn't say that I'm on electoral roll, also none of my credit cards appear there) therefore I have no credit history at all. All what is recorded - it's address change 5 years ago and number of credit searches done.
    Could please someone advice what I should do in such case? Is it my bank's responsibility to inform Experian or vice versa?
  • izools
    izools Posts: 7,513 Forumite
    1,000 Posts Combo Breaker
    LauraZ wrote: »
    I've got a problem and not sure how to deal with it.
    I have two current accounts, two credit cards (both from Lloyds TSB) for over 3 years now. I am on the electoral roll and I was trying to build up my credit history. I never missed a payment. Recently I got refused for mortgage. Then I checked my credit history at Experian and found out that they don't have any data on me (i.e. it doesn't say that I'm on electoral roll, also none of my credit cards appear there) therefore I have no credit history at all. All what is recorded - it's address change 5 years ago and number of credit searches done.
    Could please someone advice what I should do in such case? Is it my bank's responsibility to inform Experian or vice versa?

    It sounds like the address that Lloyds TSB and your local authority have on file is formatted differently to the address that you gave Experian when signing up for Credit Expert.

    Check with your local authority for how your address is formatted in the electoral register - and this address must be given to Experian verbatim when checking your credit file. This is the also address format you must use when applying for further credit, even if it is formatted incorrectly, or the creditor will pull up a null file.
    Cashback Earned ¦ Nectar Points £68 ¦ Natoinwide Select £62 ¦ Aqua Reward £100 ¦ Amex Platinum £48
  • jfl981
    jfl981 Posts: 10 Forumite
    I note cancelling old cards is recommended to improve one's credit score. However if they have a zero balance, what about the issue of a credit ratio (i.e. ratio of amount of credit used to available credit)? I heard it is good to have a low credit ratio so shouldn't keeping old cards alive be good for the credit score?
    Or is this only used in the US?
  • jfl981 wrote: »
    I note cancelling old cards is recommended to improve one's credit score. However if they have a zero balance, what about the issue of a credit ratio (i.e. ratio of amount of credit used to available credit)? I heard it is good to have a low credit ratio so shouldn't keeping old cards alive be good for the credit score?
    Or is this only used in the US?

    Of course you should always keep a couple of live accounts, but not like 20! So if you have 3 credit cards all with reasonably small limits then leave them open, why not?

    If you have 10 cards all with £5k + limits then that is a £50k liability and not many lenders will grant you credit, even if £0 balance as the possibility is there for you to rack up £50k of debt. :p
    :o 2010 - year of the troll :o

    Niddy - Over & Out :wave:
  • jfl981
    jfl981 Posts: 10 Forumite
    So this is definitely programmed into their computerised approval systems? Because it would seem to me that there isn't time for a human to check this and make a decision in the quick time it takes to get online approval these days.

    Do they all check all these individual things, or just check a numerical credit score value that is calculated reproducibly based on everything added together? And if it's the latter, what is the formula?
  • they get a breakdown in binary format from the CRA's which added together creates what is known as a credit score.

    So you having 10 cards may give you 4 points but if you had 3 cards you may get 20 points. The actual scoring process is a guarded secret from lender to lender.
    :o 2010 - year of the troll :o

    Niddy - Over & Out :wave:
  • jamsa
    jamsa Posts: 11 Forumite
    edited 26 February 2010 at 7:25PM
    I saw an offer in Tescos for a mobile phone from T-Mobile at £15 per month on a contract. I thought the deal was great but even though I have an excellent credit score I was rejected by the computer system. I then checked my details with the credit scoring agencies (Equifax and Experian) I also checked my electoral roll details and got in touch with both to make sure they all had correct details. The Angencies had no record of the credit refferals from Tesco's but I dont know why.
    I then went to T-Mobile sale direct, they tried to organise my purchase and debited my bank account with a small amount to check it was genuine, they were satisified, but then finally rejected my application and could not say why as they dony have that info form the credit check.
    I then spoke again to Equifax and again checked my details, they confirmed that they had been updated and that if I made another application to T-mobile it would not be rejected on the basis of failing the previous one on the 22nd ( THIS IS MORE THAN LIKELY NOT THE CASE) Today I therefore tried again having been told that it should just be a formality in getting the mobile phone I wanted, they had checked and double checked my details and sent me an email to that effect BUT...I WAS REJECTED ONCE AGAIN!!!!

    I AM FED UP OF BEING REJECTED WHEN I HAVE CLEARLY DONE NOTHING WRONG AND IT IS A SYSTEM INTERPRETATION OF SOMETHING THAT HAS PREVENTED MY APPLICATIONS NOW TWICE WITH T MOBILE

    So be warned..even if you have a good credit score you might be risking it when you apply for a phone with T Mobile!

    Thanks
    PS I am now contemplating contacting my MP to see what can be done to ensure genuine folk can be compensated when it is proven that they were and are not at fault! Why should these credit score companies not have an independent panel that oversees issues such as i have had?
  • izools
    izools Posts: 7,513 Forumite
    1,000 Posts Combo Breaker
    jamsa wrote: »
    I saw an offer in Tescos for a mobile phone from T-Mobile at £15 per month on a contract. I thought the deal was great but even though I have an excellent credit score I was rejected by the computer system. I then checked my details with the credit scoring agencies (Equifax and Experian) I also checked my electoral roll details and got in touch with both to make sure they all had correct details. The Angencies had no record of the credit refferals from Tesco's but I dont know why.
    I then went to T-Mobile sale direct, they tried to organise my purchase and debited my bank account with a small amount to check it was genuine, they were satisified, but then finally rejected my application and could not say why as they dony have that info form the credit check.
    I then spoke again to Equifax and again checked my details, they confirmed that they had been updated and that if I made another application to T-mobile it would not be rejected on the basis of failing the previous one on the 22nd ( THIS IS MORE THAN LIKELY NOT THE CASE) Today I therefore tried again having been told that it should just be a formality in getting the mobile phone I wanted, they had checked and double checked my details and sent me an email to that effect BUT...I WAS REJECTED ONCE AGAIN!!!!

    I AM FED UP OF BEING REJECTED WHEN I HAVE CLEARLY DONE NOTHING WRONG AND IT IS A SYSTEM INTERPRETATION OF SOMETHING THAT HAS PREVENTED MY APPLICATIONS NOW TWICE WITH T MOBILE

    So be warned..even if you have a good credit score you might be risking it when you apply for a phone with T Mobile!

    Thanks
    PS I am now contemplating contacting my MP to see what can be done to ensure genuine folk can be compensated when it is proven that they were and are not at fault! Why should these credit score companies not have an independent panel that oversees issues such as i have had?

    The fact alone that the credit search made by T-Mobile doesn't show on your Equifax report means that you were declined either

    > Because you provided the address in a different format to how it is on your credit file so they brought up a null file, or
    > Because you failed based on their pre-screening questions.

    Your credit file does not dictate by itself whether or not you will get approved for something - other questions - employment status, marital status, dependants, time with bank, time with employer, time at address, income, etc are all things taken into companies when they credit score you, but aren't taken into account when a CRA shows you your "Score".

    The scores sold by CRAs are NOT USEFUL as they do not provide a interpretation based on the bigger picture, which is what all creditors will rate you on.

    So no warning to heed, other than you need to heed the advice that either a. your basic circumstances put T-Mobile off to the extent that they didn't need to credit check you to not want you as a customer or b. you need to be more specific and fastidious when providing your address to creditors ;)
    Cashback Earned ¦ Nectar Points £68 ¦ Natoinwide Select £62 ¦ Aqua Reward £100 ¦ Amex Platinum £48
  • If you have been advised to apply from someone at the CRA then they have acted unlawfully because they wouldn't have a bl00dy clue so could never give that advice - each lender scores differently and they do not have to give a reason why they decline you either.

    I'd suggest you don't meet their scoring model - no big deal, accept it and move on. However if their systems clearly say that you cannot apply more than once is a set period, i.e. 6 months, and you did - their systems should auto reject you prior to doing another search.

    Just send a secure message to the CRA and tell them you only applied the once and therefore want the additional searches removing. They will decline and pass the request back to T Mobile who will then say to contact them directly and in the process they will give the CRA their address and number for you to contact to sort out.

    No lender is obliged to grant credit, and it seems T Mobile don't want your custom - to be fair, why you'd want to give it them anyway is another matter altogether!
    :o 2010 - year of the troll :o

    Niddy - Over & Out :wave:
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 351.2K Banking & Borrowing
  • 253.2K Reduce Debt & Boost Income
  • 453.7K Spending & Discounts
  • 244.2K Work, Benefits & Business
  • 599.2K Mortgages, Homes & Bills
  • 177K Life & Family
  • 257.6K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.2K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.