Default removed, and score has gone down, help!!!

baby_2009

Hi All,

My credit score yesterday was 483 on experian (with 1 default), however a default came off today which I was very happy about, but my score is now 276, what is going on?

Thanks.

LeeSouthEast

Stop paying for Experian scores for a start, they're worthless and meaningless.

Have you applied for credit lately? Moved house? Missed payments? Settled accounts? Used up a lot of available credit?

baby_2009

why are they not worth it?, arent they a baseline for what lenders see potential customer as?

Applied for a credit about 4 months ago,.

Thanks.

LeeSouthEast

The problem is, they are a score based on their own determinations. Every single lender does their own calculation, and doesn't even get the Experian one as part of your credit file. Every lender has their own scoresheet for what determines a 'good risk' for them. Experian also do not take your income / job stability / location / sector (and a thousand other things) into consideration like a real lender does.

On that basis, save yourself £6 a shot and concentrate on making yourself attractive to lenders: Keep up payments on existing credit, keep your percentage of credit used low in relation to the total, get/stay on the electoral roll, don't close old accounts unless you have loads of them, and keep plodding along. If you have CCJ's and arrears, make sure you settle them.

The magic will happen by itself over time. The only difference is you will be multiples of £6 better off

tinodwg

LeeSouthEast wrote: »

The problem is, they are a score based on their own determinations. Every single lender does their own calculation, and doesn't even get the Experian one as part of your credit file. Every lender has their own scoresheet for what determines a 'good risk' for them. Experian also do not take your income / job stability / location / sector (and a thousand other things) into consideration like a real lender does.

On that basis, save yourself £6 a shot and concentrate on making yourself attractive to lenders: Keep up payments on existing credit, keep your percentage of credit used low in relation to the total, get/stay on the electoral roll, don't close old accounts unless you have loads of them, and keep plodding along. If you have CCJ's and arrears, make sure you settle them.

The magic will happen by itself over time. The only difference is you will be multiples of £6 better off

I was of the assumption, that having unused credit lines adversely affected how a lender looks at an application given that the line of credit can be used at any time thus affecting affordability. Closing unused credit accounts, increases affordability....in the eyes of the lender. That is how I assumed it works?

LeeSouthEast

It's a fine balance. What you need to get is long-term, well-managed credit. Closing 3 credit cards you opened in 1976 but that only have credit limits of 1k each, will likely be a bad credit-scoring move.

On the flip side, closing 3 (again unused) credit cards you opened in 2007, but that have 15k available credit each, will do you a huge favour, assuming any other credit cards you have have low/no balance in proportion to the credit limit.

baby_2009

contacted experian and they explained the reason why my score has gone down by such a significant amount. He said experian score in 2 categories, one is for people who has a default (in one league like the football chapionship), and the second is people were good credit (in one league like the premiership). If you move from the chapionship to the premiership your score goes straight down but will go higher quicker than if in the championship.

That is the way he explained to me.

property.advert

LeeSouthEast wrote: »

It's a fine balance. What you need to get is long-term, well-managed credit. Closing 3 credit cards you opened in 1976 but that only have credit limits of 1k each, will likely be a bad credit-scoring move.

On the flip side, closing 3 (again unused) credit cards you opened in 2007, but that have 15k available credit each, will do you a huge favour, assuming any other credit cards you have have low/no balance in proportion to the credit limit.

I have to say I do not agree. Every bit of risk programming I have come across has been biased to the pack approach, where there is a reliance on the risk assessment of others. If someone has assessed you as worth a 15k line of credit, then removing that would not necessarily raise your risk profile on the negative side but it would reduce your risk profile on the positive side, resulting in a net loss. It is the human approach to use the data you obtain and part of that data is to see what others have offered. In the risk profile, is it better to be 25% of a 4*15k risk or be 100% of a 15k risk ? Profiling will err to the former and that is why I believe most of this stuff about removing dormant accounts is just rubbish. I would however say that you should just use them now and again.

baby_2009

checked my experian and the score is 442 which is very poor, and my equifax is fair.

with a fair credit score is it likely i would be offered credit for a car?

DarkConvict

The experian score as already mentioned doesn't mean anything. It could be 1000 (best possible) and still you could be turned down for credit because a creditor like a bank will look at (score) your file differently to experian.

All you can honestly do if you want credit on a car, (which i don't recommend as they are expensive in my opinion) is apply and see if they accept or reject you. Even with a bad score many places accept but then charge a higher interest rate due to you been a higher risk.