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

never-in-doubt

jacekand wrote: »

One thing I cannot find in the article is how your address is influencing your credit score? I often heard if you live in a property where someone else has debts, it'll also influence you; is that true? I'm a bit worried as there was someone living in my flat and now the guy moved out but there's his correspondence coming and I know it's mostly regarding his debts and I don't know if this is influencing my credit score? I've been trying various ways to stop his mail coming and I cannot do anything!

No - you're believing the old myth that 'blacklists' exist - they do not.

Credit is unique to you as a person, therefore someone else in a shared house will have no links to you and as such their debt (or excellent credit rating) will have no affect on you whatsoever - don't worry

Regards to the mail, just send it back as "return to sender - unknown at this address".

economatrix

jacekand wrote: »

One thing I cannot find in the article is how your address is influencing your credit score? I often heard if you live in a property where someone else has debts, it'll also influence you; is that true? I'm a bit worried as there was someone living in my flat and now the guy moved out but there's his correspondence coming and I know it's mostly regarding his debts and I don't know if this is influencing my credit score? I've been trying various ways to stop his mail coming and I cannot do anything!

I also have this concern, as the previous tenants in our flat owe Council Tax. We moved in in April and have done everything by the book: got on the electoral roll, sorted our CT, sent claim letters from the Council back with an explanation that we have no forwarding address for the previous tenants etc. We thought it was all sorted, but yesterday I cam home to a bailiffs notice for 'distrain on goods', relating to the previous tenants. :eek: I've now contacted the bailiffs, the Council and the landlord to make it clear (again :mad:) that the debtors do not live at this address. The Council are obviously a bit inefficient with their records, as they know we are different tenants.

My concern now is that there will have been a CCJ served on the property and that even though it's not in our names, our credit score will be affected. My flatmate and I are both good with money (no defaults or massive debts etc), but we both have weak credit ratings (due to self-employment and periods of travel, plus a fairly low income). Therefore I absolutely don't want anything else to go against us! Very unfair if it's nothing to do with us...

If anyone has any experience of this type of situation, please could you let me know:

1) Will the CCJ on the property show up on a credit check?
2) Even if normal debts don't, is Council Tax viewed differently?
3) How we can have it removed if it is affecting us?

Also, if anyone has any experience dealing with bailiffs when the debt is not yours, I would appreciate hearing your experiences. Someone told me that they only have the right to enter the property for Council Tax debts, but surely they have no right if you are not the debtors? I'm hoping it will all have been sorted out, but they didn't amend the record properly before...

Thanks heaps.

never-in-doubt

Read my last post - if it is not your CCJ/Default then it will have NO affect on your ability to obtain credit!

never-in-doubt

economatrix wrote: »

If anyone has any experience of this type of situation, please could you let me know:

1) Will the CCJ on the property show up on a credit check?
2) Even if normal debts don't, is Council Tax viewed differently?
3) How we can have it removed if it is affecting us?

Also, if anyone has any experience dealing with bailiffs when the debt is not yours, I would appreciate hearing your experiences. Someone told me that they only have the right to enter the property for Council Tax debts, but surely they have no right if you are not the debtors? I'm hoping it will all have been sorted out, but they didn't amend the record properly before...

Thanks heaps.

1. Nope - the CCJ was against the person - NOT the property!
2. Nope - its nothing to do with you is it? Treated the same, to be ignored!
3. Nope cos under DPA it has nothing to do with you does it?

Bailiffs have no right of entry, the debt is not yours! Read this for template letters: Dealing with Bailiffs Harassment

The letter you send the bailiff is here: #3

zezou1

I recently tried to get finance for a car through a garage.
Unbeknown to me the garage tried four different lenders for finance and consequently four credit searches showed up on my credit report.
As a result my score plummeted to 520 with Experian which on their scale is "very poor".
I called Experian to ask them how the scoring system works and was told "all the variables from your report go in to a computer and your score comes out"
Why are the credit agencies so vague about the scoring?
Surely their must be parameters , for example:
if you miss a payment your score will reduce by 50 points
if you have had 4 credit searches your score will reduce by 200 points.etc etc
We are not told exactly how the scores work, are we not entitled to that information?
The lady i spoke to at Experian told me they do not even know what the parameters are either , the computer just generates the score.
It doesnt seem very fair to me, hoping someone can shed some light on this.
Thanks

NickX

zezou1 wrote: »

The lady i spoke to at Experian told me they do not even know what the parameters are either , the computer just generates the score.

Absolutely, the computer may aswell be a random number generator.

The scores are meaningless and nobody should pay good money for a number simply created by a bizarre computer program.

no_cally_doe

Katy_M wrote: »

This is my problem too :mad:

It seemed so much fun at the time but I would definatly do things differently if I could turn back the clock!

I think children should be educated in economics again at school. Either that or be assigned homework of 1 hours revision of the mse forum every night.

This forum has been invaluable to me and I wish I had stumbled across it as soon as I started earning money. The advice given is always so useful and I'd like to take this opportunity to thank people like Moggles and Never-in-doubt (and many others of course) who constantly take time out to help so many people.

I completely agree there should be a focus at some point within the educational system that aims to teach kids (16-20) about how to handle money, credit cards etc. I got 2 defaults from Bank of Scotland because I never knew I had to pay monthly bills on a visa card, the other was for an unpaid overdraft. I know that is pretty comical but i was just so naive, I just seen free money!

If we educate the following generations this country will stand stronger financially and we will change the quick fix mentality that I had when I was just going to university.

izools

zezou1 wrote: »

I recently tried to get finance for a car through a garage.
Unbeknown to me the garage tried four different lenders for finance and consequently four credit searches showed up on my credit report.
As a result my score plummeted to 520 with Experian which on their scale is "very poor".
I called Experian to ask them how the scoring system works and was told "all the variables from your report go in to a computer and your score comes out"
Why are the credit agencies so vague about the scoring?
Surely their must be parameters , for example:
if you miss a payment your score will reduce by 50 points
if you have had 4 credit searches your score will reduce by 200 points.etc etc
We are not told exactly how the scores work, are we not entitled to that information?
The lady i spoke to at Experian told me they do not even know what the parameters are either , the computer just generates the score.
It doesnt seem very fair to me, hoping someone can shed some light on this.
Thanks

Credit scoring doesn't work like this.

The credit score you see is Experian's interpretation on the data seen on your credit report, based on thier score sheet.

Every creditor you apply to will have a different score sheet, and produce a different number, based on the same information on your credit report.

It depends on which pieces of information the Creditor's score sheet weights more heavily.

Example Creditor A may consider 3+ searches in six months very bad indeed, but one missed payment in the last year not so bad.

Creditor B may consider the searches not as much of a problem as one missed payment in the last year

Creditor C might not give you credit if you've had any missed payments in the last year or more than 2 searches in the last six months, but might not mind if you aren't on the electoral role.

The "Score" that creditor A, B, and C, give against your credit file will all be different.

But it is even more complicated than that.

As Creditor C might not mind if you've had a missed payment as long as you are a homeowner and have been in a stable job for many years. Credit B might not give you credit if you've had too many searches or a late payment, if you've recently moved or changed jobs.

Every single piece of information on your application, age, marital status, residential status, time in job, time with bank, income to debt ratio, balance to limit ratio, number of accounts, amount of available credit, number of missed payments, number of defaults, last missed payment, etc etc the list goes on ad infenitum, the point is that every single pieces of information is given a score, and the scoring technique used differs from creditor to creditor, and it all adds up and if the sum total of all the subscores applied to each piece of information is above the creditor's "pass mark", you get the facility. If not, you don't.

This is why creditors can't say specifically why you application was refused, because it is rarely because of any one piece of information, but due to a culmination of all the facts added together.

The score you buy from Credit Reference Agencies is not useful information. The information within your credit report is far more important. Don't worry about a number, worry about the facts.

Have you applied for credit more than twice in the last six months? Have you missed any payments in the last year? Have you got any outstanding Defaults or CCJs? It's the actual data within your report that you should be looking to improve upon, not the number that the credit reference agency apply - because that number will bare no relevance to the number a creditor gives you.

I think the most important thing to note here is that

it is inpossible to predict whether or not you will be granted the credit facility you apply for because we don't know what type of candidate the creditor is looking for.

Sure, Experian might give you a score of 999, but Experian might not mind that you only have two credit cards, the company you are applying to might want a customer with three or four. Or Experian might not mind that you have £9,500 of unused credit, but the company you are applying to might consider it a risk. Maybe the creditor wants a customer that always leaves a balance on their card. Some might want a customer that is about a third up to their limit, or two thirds.

Even with a flawless credit report, you aren't garunteed to be considered to have a high score in the eyes of a creditor, if you have moved recently, remortgaged recently, changed jobs or bank recently, or have dependants, or are in a leasehold property not freehold, or renting not owning. But you don't know what that creditor will consider more important before applying. It's always a gamble

/rant

zezou1

thanks for your in depth reply.
I understand Experian interpret the data on my credit report against their score sheet as you say, but am i allowed to see their score sheet ?
Or a creditors score sheet for that matter ?
Am i entitled to ask a creditor what they are looking for ?
Thanks

never-in-doubt

No - they are nothing to do with you and purely for the lender - even staff do not know the formulae for credit - it is a closely guarded secret, after all, break that and you can get whatever you want from that lender thus it is secret!

Forget it, if someone knocks you back then try elsewhere!