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

[Deleted User]

Any change in an individual's credit rating score can quite rightly be ignored, as it will prevent nothing.

A well maintained utility account will equally have no impact.

PixelPound

JohnfromEssex wrote: »

I've opened 2 energy accounts with nPower and have subsequently discovered that they have registered 2 new credit agreements with me on the Experian Credit Reference database both with zero balances. I cannot see that any authorisation to open or register a new credit account in their T&C's. Any new credit account has a detrimental impact on an individual's credit rating score, so by registering 2 new accounts that counts as a negative factor. In my case I've been downgraded from 'Excellent' to 'Fair' which has prevented me from getting good deals elsewhere. There are no other factors here, so it has to be nPower's actions. The nPower new customer agreement does mention checking credit references, but doesn't mention taking out a new credit agreement. I think this is unfair and misleading. Has anyone else had a similar experience?

Standard practice. When I went with British Gas they put two accounts on, one for gas and one for electric, even though I only paid one DD. If you don't like it then don't go with an energy provider that reports to CRA. There are plenty out there.

Are you paying in advance for your energy or are you billed afterwards? Even with a regular DD you can often use more fuel than you are paying for, e.g. in winter so you are effectively borrowing money in terms of the fuel you use until you pay for it.

[Deleted User]

Standard practice although I moved months ago and NPower haven't bothered to setup my new account yet.... and I actually want it registered!

Unless PowerShop (effectively part of nPower) don't report to CRAs unless in default....

JohnfromEssex

Thanks for the replies. The point is that an organisation can't start a CRA regulated credit agreement without the approved credit wording being signed. This is where, in my opinion, Npower are misleading customers. Over/underpaying by d/d is a commercial decision, not a credit arrangement.

Experian state that 'opening more than one credit account in a short space of time may indicate that an individual is living beyond their means' hence the credit rating downgrade. This is an unintended consequence of what nPower, and others, are doing to protect their own commercial interests.

[Deleted User]

But a drop in score means nothing.

Not maintaining your files and getting behind on your bills will affect you though.

JohnfromEssex

I agree about maintaining bill payments. That is not the issue. The fundamental point is that nPower have exceeded their mandate by registering credit agreements that weren't signed for by their customers.

A minor drop in score means nothing, yes - but a major drop can have a huge impact on all manner of things and shouldn't be ignored.

Beartricks

Experian seems to think that my credit score is perfect. Noddle thinks it's below average for my area, whatever that means. I took out a new phone contract a couple of months ago, which seems to have put a mark on my file.

I want to get a mortgage in around 12 months, so I'm attempting to sort my out my finances. My current account pays me nothing in interest or rewards, so I want to upgrade it to one that does and to open one of their every day savers alongside it, I've also opened a sacrificial account with them to switch to the TSB Classic Plus for the cash bonus and the monthly cashback which I'll probably end up using as my main account for every day spending. On top of that, I want a cashback credit card for the money and to keep my credit score up.

Which of these things is likely to affect my credit score and is there an ideal order in which to do them to increase my chances of them all going through okay and not putting too many black marks on my score when the mortgage application happens? I think the credit card should probably be the priority but it's confusing me.

[Deleted User]

A major drop in score also means nothing.

It's the data and information on your report that matters, not a fictitious number that you and the marketing teams at the CRA's see

[Deleted User]

Beartricks wrote: »

Experian seems to think that my credit score is perfect. Noddle thinks it's below average for my area, whatever that means.

If you ask two people to write down a random number, you can virtually guarantee one will be higher than the other.

DCFC79

Beartricks wrote: »

Experian seems to think that my credit score is perfect. Noddle thinks it's below average for my area, whatever that means. I took out a new phone contract a couple of months ago, which seems to have put a mark on my file.

I want to get a mortgage in around 12 months, so I'm attempting to sort my out my finances. My current account pays me nothing in interest or rewards, so I want to upgrade it to one that does and to open one of their every day savers alongside it, I've also opened a sacrificial account with them to switch to the TSB Classic Plus for the cash bonus and the monthly cashback which I'll probably end up using as my main account for every day spending. On top of that, I want a cashback credit card for the money and to keep my credit score up.

Which of these things is likely to affect my credit score and is there an ideal order in which to do them to increase my chances of them all going through okay and not putting too many black marks on my score when the mortgage application happens? I think the credit card should probably be the priority but it's confusing me.

Its normal for a search to be listed on your credit file.

Dont get too fixated on the score since only you see it, lenders, banks etc see your credit file.