Are Credit Agencies Changing Our Ratings?

PROLIANT

brighterlight wrote: »

Yes I think I understand the point about credit scores being only part of the process and subjective, but why does the latter agency - Call-Credit - provide data to the lender and the other two agencies do not? It must be significant data if it is used to help the lender with their scoring system. What is it?

I believe that Experian do the same, it seems to assist the Lender if their systems do not have any form of scoring algorithm in their software or in order to keep cost's down instead of buying in to expensive ERP financial software.

Moggles_2

TheKeyMaker wrote: »

Creditreport, checkmyfile, etc., are middle-men and they will sell you anything. If you want your current updated credit reports, do get them from the 3 agencies directly.

Absolutely. Judging from the posts on here, it's easy to be lulled into a false sense of security by these credit scores. Then it comes as a shock, when your application is turned down. Equally, some posters are put off trying at all, because of low or fluctuating scores.

Credit reports, when ordered directly from Experian and Equifax, are valuable. After all, this is the information lenders search when you apply for credit. Additional services like credit scores are a nice little earner for the credit reference agencies, but of little practical value to cc applicants and certainly not worth paying extra for. I wouldn't let these numbers distract you from tackling the things that really matter

Remember credit reference agencies are there to provide your credit history, but the actual methodology (and the process of scoring itself) is done by their clients, the lenders. None of us - including the agencies - knows what criteria are used by individual companies. Lenders do not disclose this information. It's not uncommon for forum users to post different scores from the three CRAs or various scores from the same agency a few weeks apart. I suspect that the lenders' scores, had we access to them, would be different from each other as well!

brighterlight_2

PROLIANT wrote: »

I believe that Experience do the same, it seems to assist the Lender if their systems do not have any form of scoring algorithm in their software or in order to keep cost's down instead of buying in to expensive ERP financial software.

Is Experience different from Experion? What is ERP?

PROLIANT

brighterlight wrote: »

Is Experience different from Experion? What is ERP?

Sorry, me silly I meant Experian.
ERP (Enterprise Resource Planning) is a software package aimed at many different types of buisness.
Oracle Financials is one as an example.

DebtHater

JohalaReewi wrote: »

Credit scores are made up numbers and are basically meaningless. As long as your credit history is correct, don't worry about the score given to you by a credit agency.

See Martin's article...
http://www.moneysavingexpert.com/banking/credit-rating-credit-score

I would disagree there, your credit score is a number between 1-1000 and this is a summary of your credit worthiness.

It is used by many institutions, including estate agents. Do you really think they sit there and read your credit file from start to finish? All these "Instant Decision" applications online use your credit score as a factor in their decision.
Only if you have notices of correction does the lender actually read your file, hence why some decisions take 7+ days
Anything below 600 is negative or "below average", mine is 433 even though I have only 1 default from 3 years ago and no missed payments.

Remember credit reference agencies are there to provide your credit history, but the actual methodology (and the process of scoring itself) is done by their clients, the lenders. None of us - including the agencies - knows what criteria are used by individual companies. Lenders do not disclose this information. It's not uncommon for forum users to post different scores from the three CRAs or various scores from the same agency a few weeks apart. I suspect that the lenders' scores, had we access to them, would be different from each other as well!

Correct. All lenders use different models when deciding to accept people, all based on the scores gained by individuals.
One lender, lets say Virgin, will have a totally different model as Barclaycard, for example.
And how lenders decide to interpret a credit file is their own decision, and risk.

I would agree though with the above comments regarding the credit agencies, I have used checkmyfile.com in the past and they dont update as much as Experian do, I noticed changes appearing quicker on CreditExpert (Experian) than on checkmyfile.

Jemma-T

brighterlight wrote:

Are Credit Agencies Changing Our Ratings?

I don't know but the more I think about these consumer and business (ratings agencies) the more I start to think they're all corrupt and of course corruptable. Just like these accountancy firms that signed of these dodgy accounts year after year.

It'll all come out in the wash I suppose.

brighterlight_2

DebtHater wrote: »

your credit score is a number between 1-1000 and this is a summary of your credit worthiness. It is used by many institutions, including estate agents. Do you really think they sit there and read your credit file from start to finish? All these "Instant Decision" applications online use your credit score as a factor in their decision. Only if you have notices of correction does the lender actually read your file, hence why some decisions take 7+ days. Anything below 600 is negative or "below average"

This makes a lot of sense. Maybe the credit agencies have a duty of care to the lenders with regard these scores. It looks like the lender makes the final decision of course, but maybe credit scores are being lowered because of the current economy and credit availability. Mine has gone down although my situation has not changed.

Bagette

Jemma-T wrote: »

I start to think they're all corrupt and of course corruptable. Just like these accountancy firms that signed of these dodgy accounts year after year.

I don't know if it is about full scale corruption, but I agree that the credit agencies and the lenders do work closely together so there is always a chance that something in their mutual self interest could be put before consumers interests. My credit limit was suddenly reduced and I have no explanation for it.