How is my credit score so low?

smj43

izools wrote: »

Yes.

Would you lend to someone who has an account already in arrears?

And whilst the credit reference agency scores are unlikely to be representative of an individual creditors scoring techniques, they do contain a certain amount of truth. In the OP's case, his score has dropped dramatically as a result of one of his accounts currently being in breach of the terms and conditions and, as far as their credit file is concerned, is yet to be brought back in line with the terms of the account. I'm sure any creditor would agree with Experian's assessment of the situation in this instance

Don't worry OP, it will only hold you back for 6 to 12 months, and is probably a good thing giving you the intensive you need to put more effort into running your current account properly. Since my Bankruptcy I have never been 1p over my OD limit, never bounced a cheque or DD, and never had insufficient funds for an SO. Literally 24+ months 100% flawless account conduct and it is very possible with the right perspective. Good luck! :beer:

You didn't read my post above. My bank account had a status of '1' for 1 month in the 6 years I have had the account. This was an honest mistake. I had the money in my savings account and forgot the transfer it to my current account in time. I paid it back almost straight away, and my account is now at status '0' and has been for 2 months. Surely 1 little hiccup like that wouldn't totally trash someone's credit score?

izools

smj43 wrote: »

You didn't read my post above. My bank account had a status of '1' for 1 month in the 6 years I have had the account. This was an honest mistake. I had the money in my savings account and forgot the transfer it to my current account in time. I paid it back almost straight away, and my account is now at status '0' and has been for 2 months. Surely 1 little hiccup like that wouldn't totally trash someone's credit score?

I did read your post above.

The further in the past the hiccup becomes, the less impact it will have and after 6 to 12 months the adverse effect will be close to nil.

You will have to wait for your credit standing to improve as a creditor will need evidence to show that this hiccup is certainly not a sign of things to come or the first sign of debt stress / struggling. Two months isn't enough to prove, in the eyes of most creditors, that this was most certainly just a hiccup never to happen again.

I'm not making this stuff up to !!!!!! you off and neither are Experian.

Best of luck

cooltt

Ok here's my 2 pennies worth.
Had lots of credit cards and loans, always paid on time and settled everything, never been in arrears with anything in my life, good job and couple of credit cards.

Applied for a new card this week to transfer a balance excpeted with 5K limit then out of curiosity checked my credit score with Experian.....wait for it....VERY POOR!

So yes their score means nothing and it's disgusting that they make out it's what lenders go by. They should be reported trading standards.

izools

cooltt wrote: »

Ok here's my 2 pennies worth.
Had lots of credit cards and loans, always paid on time and settled everything, never been in arrears with anything in my life, good job and couple of credit cards.

Applied for a new card this week to transfer a balance excpeted with 5K limit then out of curiosity checked my credit score with Experian.....wait for it....VERY POOR!

So yes their score means nothing and it's disgusting that they make out it's what lenders go by. They should be reported trading standards.

Yes but do you think you'd have been approved if only two months prior you hadn't paid your other credit card bill?

cooltt

izools wrote: »

Yes but do you think you'd have been approved if only two months prior you hadn't paid your other credit card bill?

Impossible to say since each leander has their own criteria.

The point is i've had an excellent score in the past and still been turned down for a card, so the logical conclusion is (as many have already said) their score is meaningless.

rtapeloadingerror

don't pay the full bill every month, as it lowers your score, instead leave over a small amount so that the company makes something on interest.

izools

rtapeloadingerror wrote: »

don't pay the full bill every month, as it lowers your score, instead leave over a small amount so that the company makes something on interest.

Most credit card companies don't even report how much the customer has paid, just what the statement balance is. Both of my Sygma cards only report the statement balance, nothing else. Same can be said for Vanquis and several other cards.

Experian_company_representative

JohalaReewi wrote: »

Oh yes it is !! :beer:

I'm sorry but many of the comments on this thread are way off the mark.

The vast majority of lenders use consultancy services provided by the credit reference agencies to build and maintain their credit scoring systems. This is a fact. As a result, Experian does know how lenders typically score credit reports and, although this can and does vary from lender to lender, it is possible to generalise. And this is exactly what we do with the Experian Credit Score - it's a guide to how a lender will rate your credit report. It is certainly not meaningless and for someone to suggest it's a random number generator is absolutely ludicrous!!

On status codes and current accounts, please note that these have different definitions compared to other credit products. If you read the guidance that comes with your credit report you'll find a table of code definitations for standard credit accounts and a separate one for current accounts. For the latter, a bounced cheque or direct debit can be registered as a status 1.

smj43 - if you contact us direct you can ask one of our advisers for some personalised pointers on improving your credit report/scoring. Assuming you're already on the electoral roll, it'll probably revolve around maintaining a few credit products according to contact and keeping your total borrowing well within what you can sensibly afford on your income.

Hope that helps.

James

izools

Experian_company_representative wrote: »

it is possible to generalise

No it isn't.

You don't know how each individual creditor rates an individual and you can't possible create a scoring system that is on par with all of the other credit scoring systems in the UK.

For example, your system does not mark people down for holding accounts in an arrangement to pay.

Can you please explain why you rate my mother, who has a Barclaycard which has been in an Arrangement to Pay for seven years, as having an "Excellent" credit score of 999?

And yes, the special instruction indicator is present on her credit file against this account showing as still in place.

This is not even remotely representative of how any lender will rate her.

She applied for an Egg card and a Post Office card at the beginning of the year, both turning her down due to "Adverse Information". This is the only adverse information on her credit file as confirmed by one of your own call center agents and they themselves were unable to comment as to why your scoring system doesn't mark customers down for holding accounts in an AP.

The other vital fact you ignored is that your score doesn't take into account the following information:

• Residential status
• Employment status
• Time with employer
• Time at bank
• Time at address
• No. of dependents
• Income
• Expenditure

Name me one creditor who doesn't take this information into account when assessing a customers ability to handle the credit they are applying for. One.

Bet you £1,000,000 that you can't!

Edit: @ James / Experian: Comments?

JohalaReewi

Experian_company_representative wrote: »

I'm sorry but many of the comments on this thread are way off the mark.

The vast majority of lenders use consultancy services provided by the credit reference agencies to build and maintain their credit scoring systems. This is a fact. As a result, Experian does know how lenders typically score credit reports and, although this can and does vary from lender to lender, it is possible to generalise. And this is exactly what we do with the Experian Credit Score

It's not a credit score. Experian are not lenders so it is not a score for credit. It is only an Experian score.

- it's a guide to how a lender will rate your credit report.

You mean how a lender might rate your credit report.

It is certainly not meaningless and for someone to suggest it's a random number generator is absolutely ludicrous!!

You have just said yourself it is a guide and as many posters on MSE have found, the Experian score is meaningless. Getting someone to pay you to tell them their Experian score is 999 (or whatever) is pointless.

Random numbers are generated from seed data and have a formula applied to them to make them appear random. Experian take customer's raw data, apply their magic formula and come up with a number.

On status codes and current accounts, please note that these have different definitions compared to other credit products. If you read the guidance that comes with your credit report you'll find a table of code definitations for standard credit accounts and a separate one for current accounts. For the latter, a bounced cheque or direct debit can be registered as a status 1.

smj43 - if you contact us direct you can ask one of our advisers for some personalised pointers on improving your credit report/scoring. Assuming you're already on the electoral roll, it'll probably revolve around maintaining a few credit products according to contact and keeping your total borrowing well within what you can sensibly afford on your income.

Hope that helps.

James

As izools said, when applying for credit, you normally supply data which is not held by Experian so the scoring systems used by real lenders will include this as well as your credit history. They will also have different weightings and product/client profiling. There is no way the Experian score can reflect this thus making the Experian score more unreliable. Perhaps in a utopian world, Experian will have all of our data on file and their score will be a truly universal credit score used by everyone. But at the moment, this is not the case and no lenders use the Experian score.