Credit Reference Agencies

funion

Hi, Can anyone shed any light on this by any chance? After being rejected for a remortgage by lliance and Leicester I have run a report on my credit rating on CallCredit as I know A&L use all three agencies. Experian score is 'Good', Equifax info is identical to Experian, but CallCredit give me two stars even though none of the reasons they present for giving me this score are evident in my report. The info in their report is again very similar to that of Experian and Equifax. This is how they explain it and why I am so confused about it:

Your score indicates that credit providers may have some concerns about accepting your business. This could be because you have had some problems making all your payments on time in the past, and either missed some payments in the last year or had more significant problems in years before that.

>>The report shows 10 agreements in the last 6 years - a mortgage, a loan , couple of smaller loans I took out for buying various items like a Macbook etc. 4 are settled. There are no late payments, defaults or CCJ's. All marks are green ticks.



However, you could also find yourself with this score if you have not had many credit accounts in the past at all. This is because credit providers will have very little evidence to go on when making a decision on whether to grant you credit, so they may tend to be cautious.

>>Like I say, the report correctly shows 10 agreements, 4 settled in last six years. No late payments, No defaults, no CCJ's, all green ticks.


You may have made quite a number of applications for credit because the first companies you approached would not give you credit and so you had to apply elsewhere. This will have affected your credit score because if you make too many applications in a short space of time it can be seen as a warning sign.


>>No applications for credit this year apart from Alliance and Leicester for the remortgage, the reason why I am querying it. This search show on the report, this is th only one.



Improving your credit score can be done in any of the above cases. Firstly, it�s important to demonstrate that you have stability in your life. Living at the same address for a while helps to demonstrate this to credit providers.

>>I have been at the same address for 10 yrs 3 Months. This is correctly stated on the report.

You should make sure that you are registered on the electoral roll as this helps them to confirm that you live there and how long you have been there for.

>> I have been on the electoral roll for the same time as living at the address, again reflected in the report so can't do that one.


Secondly, use the credit facilities that you already have on a regular basis, but make sure that any payments you need to make on existing commitments are made as soon as they are due. Starting to use direct debit, if you don't already pay in this way, can help with this.



>>Everything is paid by direct debit and I have never missed a payment. I have one HBOS credit card that has only been paid the minimum amount 4 times in the last two years, the rest of the time I have paid considerably extra off. I have only reached the limit of the card once but never gone over it. This is also shown on the report. I am well under my credit limit but don't pay it off in full so do pay them interest as a result.



I have of course asked CallCredit for an explanation for the poor rating. I'll let you know what they say but wonder if anyone else here has experienced this sort of score for no apprarent reason? I don't trust their methodology at all and you would have thought this would be the first thing they'd want to get right. I my case it seems just wrong.



Thanks, TG

Ama

Sounds a little strange that you have a poor rating despite everything being order. When you checked your score at experian, did they also explain the factors which influenced your score? Also what percentage of your available credit is in use?

Moggles_2

funion wrote: »

Can anyone shed any light on this by any chance? After being rejected for a remortgage by Alliance and Leicester I have run a report on my credit rating on CallCredit as I know A&L use all three agencies. Experian score is 'Good', Equifax info is identical to Experian, but CallCredit give me two stars even though none of the reasons they present for giving me this score are evident in my report. The info in their report is again very similar to that of Experian and Equifax.

Welcome to MSE!

I have one HBOS credit card that has only been paid the minimum amount 4 times in the last two years, the rest of the time I have paid considerably extra off.

In other words, you have a rolling balance which must be costing a fortune. This (in addition to your three loans) could indicate over-commitment.

funion

Firstly thanks very much for your welcomes and fast responses, much appreciated. Ama: Experian score me well for what look like the same reasons that CallCredit don't. I have seen this 'available credit' figure on my Experian report but I am not sure what 'available credit' actually means. My total credit is currently: HBOS credit card at £800, an RBS loan at about £3,500, a £500 overdraft and another £700 overdraft on a joint account with my partner. The current mortgage is in my name and stands at about £88K. The mortgage app was to finally (after ten years!) go for a joint mortgage with my partner whos scoring on Experian is better than mine (965). The amount was £91K on a £130k valued property. As you can see not a massive burden of personal debt. I have plenty of money left over every month and earn £38K PA. My partner ir pro ratad at £25k but currently works 3 days a week as we have two little 'uns. To answer your kind response Moggles, this I guess is what confuses me about the idea of 'over commitment' and 'available credit'. The report does not see your income, so how would over commitment be worked out if not from the evidence of late payments etc which do not exist on my report? Experian shows me as using 98% of my 'available credit'? How have they worked out my available credit? How do they know it's correct? Myself and my partner have been deliberately careful to get ourselves into a favorable position, and Experian and Equifax scores are fair enough, the available credit bit doesn't seem to weight the score unfairly in their case, but CallCredit is different. Do you think it could just be a case of their algorithm being different and weighting it against this available credit figure? If so, how is it worked out would you know? Thanks again.

never-in-doubt

You need to start to foget these meaningless scores that you so heavily reply on...... they mean nothing in the real world. Each lender scores as appropriate and the CRA's would never be able to build a super computer to deal with a multitude of differing scoring techniques thus the score you see on a CRA means nothing and is designed to try and sell you to apply for a product suited to one of their subscribers, so for Equifax it'd be a Barclaycard / Experian may be MBNA or the likes.....

Forget the scores and look at the bigger picture

Moggles_2

I agree. Credit reference agencies are there to provide your credit history. The actual methodology (and the process of scoring itself) is done by their clients, the lenders. None of us - including the CRAs - knows what criteria are used by individual companies. Lenders do not disclose this information

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

funion

Thanks never-in-doubt, I like your fervent anti CRA stance, but to be honest it only started bothering me when Alliance and Leicester rejected a credit app for what would look to any sane person like a no brainer saying it was my score that was the problem. As you can imagine I thought 'b*llocks' and started investigating, being the inquisitive and spirited type. What I discovered perturbed and confused me. Just trying to get to the bottom of it because it's affected me. What would be the bigger picture? If you can get my focus from micro to macro it would be appreciated. Particularly if it means sorting a decent joint mortgage not at a rip off rate.

funion

Ah I see. Concentrate on the report not the score as it's going to be different to every lender. They'll just take the report as part of their own scoring criteria. The CRA scoring will have no bearing. This is reassuring info, thanks. OK, so in that case I will put this rejection down to the A&L just not fancying our business for whatever reason. I'll go to someone else who does fancy us then. Thanks all! TG

never-in-doubt

funion wrote: »

Thanks never-in-doubt, I like your fervent anti CRA stance, but to be honest it only started bothering me when Alliance and Leicester rejected a credit app for what would look to any sane person like a no brainer saying it was my score that was the problem. As you can imagine I thought 'b*llocks' and started investigating, being the inquisitive and spirited type. What I discovered perturbed and confused me. Just trying to get to the bottom of it because it's affected me. What would be the bigger picture? If you can get my focus from micro to macro it would be appreciated. Particularly if it means sorting a decent joint mortgage not at a rip off rate.

I understand what you mean but credit scoring is a weird one and as Moggles confirmed, no1 knows the processes involved enough to tell you why you were declined. One of the main stoozers with an amazing credit file (he always got accepted with like £20k + limits) got declines, strange but shows it can happen to the best of us.

What was the exact reason for decline? It will be one of 3:

1. Due to credit score
2. Due to data received from CRA
3. Due to adverse data received from CRA

Which version did they decline you on? They are the only 3 by the way

never-in-doubt

I also answered a similar question here mate: #36