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

Exile

To Never in Doubt:

Thanks for your help on the last page.

So assuming then that I have a clean slate, I go back next summer and am able to get a job right away, rent a place to live, and get on the electoral roll, what would be the best way to start building credit? Would it be wise to avoid applying for a mobile phone at first or ...? I don;t know where to start for someone who has a blank slate at 34 years of age.

Chrysalis

these credit reports still only account for part of the decision a company makes.

I have a clean credit report only 0's and on electrol roll. But I still get marked down because I live in a terraced house in a poor area.

never-in-doubt

Exile wrote: »

To Never in Doubt:

Thanks for your help on the last page.

So assuming then that I have a clean slate, I go back next summer and am able to get a job right away, rent a place to live, and get on the electoral roll, what would be the best way to start building credit? Would it be wise to avoid applying for a mobile phone at first or ...? I don;t know where to start for someone who has a blank slate at 34 years of age.

Hiya - you're welcome and good luck when you eventually decide to return (are you mad lol)

The first thing you should do is get on the electoral register THEN open a bank account, this cannot be one that you used to have in the UK.... not for the time being anyway (it could create a link if they still have your old data).....

So select a bank and get that sorted, then go for sub prime cards etc...

See here for a full list of sub prime lenders (i.e. lower start limits but higher apr to cover the risk) - The Sub Prime Credit Thread - Part IV

never-in-doubt

Chrysalis wrote: »

these credit reports still only account for part of the decision a company makes.

I have a clean credit report only 0's and on electrol roll. But I still get marked down because I live in a terraced house in a poor area.

True, but it the overwhelming decision, i.e lots of defaults/CCJ's etc will override any internal scoring. The part you meantion comes under demographics (usually supplied / identified as Acorn Demographic Data).

This alone will not decline you - you would have been refused for not meeting their criteria or their internal credit score (not the same as some people think - i.e. the CRA's never issue a score, the lender does based on data retreived by the search)

Chrysalis

never-in-doubt wrote: »

True, but it the overwhelming decision, i.e lots of defaults/CCJ's etc will override any internal scoring. The part you meantion comes under demographics (usually supplied / identified as Acorn Demographic Data).

This alone will not decline you - you would have been refused for not meeting their criteria or their internal credit score (not the same as some people think - i.e. the CRA's never issue a score, the lender does based on data retreived by the search)

and what do you think the criteria was?

live in a rich area.

basically that was the only thing wrong.
no defaults
no ccj
no bankrupty
at address 3 years
satisfactory income
land line
electrol roll

99% of declined applications the person is told is because of credit report, but thats just to cover up the real reason. These companies dont like to reveal why they turn people down.

In fact I know why I was turned down in this one case as it was my own friend doing the lookup who worked for the company. score of between 0 and 1000, the experien only gave a max 300 of the score, type of house was max 150, if own the house instead of renting was another 150, and postcode accounted for a whopping 400, so the postcode counted for more than experian. He said 550 needed to pass so if in a good postcode and own the house you get accepted even with bankrupty and ccj.

incidently type of house is where electrol roll, time at address apply. The landline also boosts that single score.

Exile

Yea, I'm starting realise how good I've had it out here. Where I am, a landlord would be told where to go if they started asking for financial information from prospective tenants. 2 months deposit+ the first month's rent is enough to keep them happy. This has allowed me to live in some pretty swanky places over the years, places that would look me up and down, hear my accent, and tell me to scarper in the UK.

never-in-doubt

Chrysalis wrote: »

and what do you think the criteria was?

Whatever they say on their Summary Box - this will tell you the criteria to apply!

Chrysalis wrote: »

live in a rich area.

Does very little to any internal scoring, demographics takes into account a small percentage of the overall score.

You are aware that there are credit scores issued by lenders and ones issued by CRA's right? The lenders scoring methods are secret - nobody knows them. They are written into the application system and only heads of know the basis of the secret scores, such as head of underwriting, head of risk and governance etc.

The CRA scores mean nothing. The CRA's do not pose a score as part of any lending criteria so your ascertation that Experian gave you 300 points is, i'm sorry, utter nonsense. They simply do not.

Before you start, I do actually know these systems very well and work in internal fraud, contracted in by the banks to find internal fraud and alleviate such occurrances from happening. I meet the senior members of governance regularly and trust me, they do not know their own scoring techniques so your 'mate' definitely doesn't!

Chrysalis wrote: »

basically that was the only thing wrong.

Right, so you know for a fact then that it wasn't to do with links, other persons, cifas, n hunter, synectic solutions data, over committed, salary etc etc? I think you need to sit back and listen to the advice i'm giving you - it is much more accurate than your supposed friend!

Chrysalis wrote: »

99% of declined applications the person is told is because of credit report, but thats just to cover up the real reason. These companies dont like to reveal why they turn people down.

LOL, ermmmm - ok if you say so :rotfl:

Chrysalis wrote: »

In fact I know why I was turned down in this one case as it was my own friend doing the lookup who worked for the company.

You are wrong, you don't know - nobody knows the real reason, it falls into one of 3 categories and that is the required prequisite..... Failed Score, Credit Ref Agency data or adverse data. That is it - nothing more, nothing else.

Chrysalis wrote: »

score of between 0 and 1000, the experien only gave a max 300 of the score,

LOL, experian cannot give any score - see above!

Chrysalis wrote: »

Type of house was max 150,

Really? so we're at 450 so far agreed?

Chrysalis wrote: »

if own the house instead of renting was another 150,

600 now yea?

Chrysalis wrote: »

and postcode accounted for a whopping 400, so the postcode counted for more than experian.

And thats the magic number of 1000 right?

Ok, just a quick question for you to mull over - what about the main scoring modules? Length of time at address, employment, type of employment, salary, income in general, expenditure, commitments, stability factors - there are loads!

This proves your mate is talking rubbish! I really could rip this post apart and spell the process out (minus the scoring module cos I do not know how this works and trust me I deal with banks at the highest level - fraud and risk) - its a secret! Accept that yea? Minnows that work for a bank know nothing - nor do some directors !!!!!!! If their scoring method was leaked or easily accessible then the whole structure of their lending would be jeapordised!

Chrysalis wrote: »

He said 550 needed to pass so if in a good postcode and own the house you get accepted even with bankrupty and ccj.

Eh? Did you know it is illegal to get credit whilst bankrupt? I think that says enough on this subject - so your mate, wherever he works, says their bank encourages bankrupts applying for credit illegally?

Chrysalis wrote: »

incidently type of house is where electrol roll, time at address apply. The landline also boosts that single score.

LOL - enough said - dippy!

Please ask your mate to post here and i'll teach him a thing or 50, also tell me the name of the lender and i'll speak to their risk and governance dept right now and have this put to bed once and for all.

We both know you're speaking crap, why don't you just walk on by and stick to whatever it is you do best!

Chrysalis

please reread what I said.

experian do not give them a score correct.

their internal scoring allocates 300 points depending on the information fed back from experian.

This is one company, obviously each company has different internal scoring methods, the company in question is a catalogue company.

For your information I have no partner, children etc. and at the time this was done I had no committed credit. I know the exact reason for it failing as I was told. You cannot argue this point with me for this one case. Obviously different companies work in different ways.

I know also tho someone who works at one of the major banks and deals with loans and overdrafts, he also told me they look at the postcode as one of the factors and his word was 'significant' when I asked how much it affects scoring. He doesn't see the ins and outs of the scoring but he sees a pattern when there is a high success rate of applicants from one area and a low success rate from another. Quite simple really putting 2+2 together. I guess it might be offensive to someone if they were told their application is turned down because they live on this rough estate, much more easier to say blame the credit reference agency.

Also think for a moment, plenty of people with ccj's can get new credit whilst also plently without a ccj get turned down, the impact on an application clearly isnt as large as you think.

never-in-doubt

Chrysalis wrote: »

please reread what I said.

I did and quoted the whole post!

Chrysalis wrote: »

I know the exact reason for it failing as I was told. You cannot argue this point with me for this one case. Obviously different companies work in different ways.

NO YOU DO NOT

It is impossible and lies - stop it, please! Nobody knows how scoring works and i'm talking bank bosses and higher for crying out loud!

be told will you !!!!!!!

Chrysalis wrote: »

Also think for a moment, plenty of people with ccj's can get new credit whilst also plently without a ccj get turned down, the impact on an application clearly isnt as large as you think.

Lol, but not bankrupt - which is what you said, CCJ's must be older than a year and defaults, well this can vary between lender and again, if the rest of the score means it would pass - the fact it goes to manual underwriting (all applications do that have adverse data like this) means the adviser would be able to allow said agreement on the basis they checked their adverse.

IT IS NOT AUTOMATED YOU KNOW!

Mips

In 6 months I have gone from 'Very Poor' to 'Poor' with Experian :beer:

In another 6 months I should have their magic score of 990 according to them.. and this 2 defaults (not satisfied and never will be)