experian credit scores

questionabout

izools wrote: »

You've absolutely 100% missed the point.

The whole point is that a "Score" is the result of a complext calculatio - it gives a predetermined amount of points to pieces of information the creditor considers good and subtracts a predetermined amount of points from pieces of information the creditor considers bad.

More advanced credit scoring systems use a "neural net" computer system wherein it is constantly fed monthly updates of customer account peformance and usage habbits. The score this system gives the banks customers will change on a month to month basis based on how customers with similiar spending and account usage trends have performed with their credit based products in the recent past.

I haven't missed the point.

You've just said the system "scores" your application, provides a result and that there is no human interaction.

Therefore why can't all the financial system scores be calculated and converted to a universal Credit Score (that is solely based on Personal Finances and updates every month). This will be on financials only - the same way some banks operate internal scores numbers on their current customers. The only difference is this entire "secret" scoring will be open for us all.

Then each and everyone of us can all have our own Official Credit Score, recognised accross the UK for credit products, debt, account conduct & wealth. Any additional requirements e.g. Job Type, Salary, Number of International Flights would need to be displayed when completing the application form. The CC company could just be honest and ask "hey were looking for a minimum score of 750 and your a frequent flyer". Proof could be asked if needed and of course the CC company's decision would be final.

My point is that a simple Universal Credit Score would make it easier for both consumers to understand their Credit Worthiness (repayment history, debt levels, stability) and understand which Products are better for them to apply for. While the CC companies can market these customers with clear "Scores Wanted" and then ask for additional requirements if needed on the Application form.

Some may say that the CC companies won't wanna do this for competition reasons. But I say they should be forced to. Its like when Confused.com opened up the Insurance market to quickly compare the best quote based on the individual. Insurance Companies make even more separate calculations when determining an insurance product yet are open when displaying how "Risky" they consider you as a new customer by displaying a Price (score). For example I know that Elephant.co.uk think I'm a much less riskier customer than Tesco Insurance, by simply comparing the prices on a price comparison.

I know it won't happen. And I didn't start this thread. But I do think that it could be done. I don't think a credit score based purely on financials alone is impossible. As for Experian, I say don't blame the player, blame the game. :cool:

izools

questionabout wrote: »

I haven't missed the point.

You've just said the system "scores" your application, provides a result and that there is no human interaction.

Therefore why can't all the financial system scores be calculated and converted to a universal Credit Score

That's not all I said atall.

All using a universal credit score would suggest that all the different creditors want exactly the same type of customer.

Using identical scoring systems across the board would irradicate a creditor from being allowed to differentiate between for example, a frequent shopper and a frequent flyer.

Or loan company A from targeting social groups that like to modify their cars and loan company B targeting social groups that don't.

Etc.

All creditors have a target market, and some creditors like MBNA who have a wide array of products have several target markets. None of them would agree to changing this, as they've made a business decision that works for them

The second and equally important point is the neural-net type scoring system which updates it's criteria on a month on month timeframe based on existing customer performance and account usage trends. I read a document a while ago that I think IBM and Lloyds TSB introduced a system like this but can't recall the exact details.

I'll try to find it when I finish work. Fascinating stuff!

EDIT: Here's something similar:

http://www.roselladb.com/credit-risk-analysis.htm

Some things to google are "Neural net credit scoring" and "statistical credit scoring"

EDIT:

The easiest way I can think of to explain why "one score fits all" doesn't work in relation to the ever more popular neural net credit scoring is this:

This method works by comparing your account conduct with customers who have similar account conduct and spending habbits / usage trends. The system calculates your risk based on how other customers of the bank have performed, who have similar account trends.

If customers with similiar account trends of you start to default, your risk will be considered higher, despite your account usage staying the same, because other people in your catagory of usage have demonstrated an inability to handle credit. The reverse applies, too.

This method of risk scoring is the most reliable for the bank and reduces their exposure to bad credit risks before the customer has demonstrated an inability to handle commitments.

BugsyBrowne

Experian_company_representative wrote: »

That's simply not true. You can order an Experian Credit Score without a monthly subscription.

The score was developed and launched following customer feedback. It had also proved very popular in the US. Some of the criticism is fair in that's it's only a credit report guide, but that's all it ever can be because, as others have said, in the UK lenders score customers in different ways and base their scores on a wider selection of data (your application form, info they have about you already, info about your financial associates etc).

James

Basically on credit expert you can earn £1000 a year have a score of 999 then go to lower my bills which will then find you the amex card,which you will then apply for and immediately get turned down why because credit expert does not take earnings into your score like a lot of other things they seem to miss.

kindofaverage

hi all, if we signed up to a credit reference agency to check our own scores monthly, is this classed as a 'search' on the files? thank.

also, as there are many agencies, is there mainly one that we should go with and pay for?

thanks

izools

kindofaverage wrote: »

hi all, if we signed up to a credit reference agency to check our own scores monthly, is this classed as a 'search' on the files? thank.

also, as there are many agencies, is there mainly one that we should go with and pay for?

thanks

I would suggest reading this thread again and re-consider paying money for a score. It isn't a score.

Checking your own credit file or paying for a "wannabe" score doesn't affect your rating or show as a search visible to other creditors, no

jamesd

questionabout, different lenders consider different things to be of different levels of significance in credit scoring. Once score wouldn't represent that so well but consumers don't really need to know about the scoring because lenders should be providing quotation searches that will let you know if you would be accepted if you applied. Getting more lenders to use quotation searches is the way forward here, so you don't apply for the credit unless you can be sure that you meet the lender's criteria.

Many lenders don't use quotation searches yet and I've even encountered one that does an application search of credit files when they know that you've applied for a type of product that they don't actually offer.

izools

jamesd wrote: »

questionabout, different lenders consider different things to be of different levels of significance in credit scoring. Once score wouldn't represent that so well but consumers don't really need to know about the scoring because lenders should be providing quotation searches that will let you know if you would be accepted if you applied. Getting more lenders to use quotation searches is the way forward here, so you don't apply for the credit unless you can be sure that you meet the lender's criteria.

Many lenders don't use quotation searches yet and I've even encountered one that does an application search of credit files when they know that you've applied for a type of product that they don't actually offer.

I prefer Lloyds way of doing it -

They get a monthly feed from Experian of your account conduct elsewhere and apply internal lending limits for overdrafts, loans, and credit cards based on this data and account conduct.

If they don't like something you do in regard to the running of your account or something on your file they set a "Credit Policy Decline".

They don't really tend to search people once you're a customer - they decide what you can have without needing to.

JohalaReewi

izools wrote: »

Then advertise it as something like a "Credit file health score" or something that accurately represents what the product is.

It is not a credit score. Suggesting it is, misleads people and misrepresents the product.

Exactly.
It is almost fraudulent.

jamesd

iztools, do those monthly request show up on your statutory credit report in any way?

izools

No, they don't. No unrecorded enquiries, no footprints, nothing atall.Experian call this "CAIS". The bank don't get your whole credit report, and they are unable to see information that predates the time I opened the account with them.If they were to do a full credit search or unrecorded enquiry they'd see all six years data but the CAIS system simply gives them a monthly update of new / changed data, so the payment status and balances on opened accounts and of I've had any credit searches in that month etc.They can't see bad credit or defaults on settled accounts that were settled prior to the date I opened the bank account.This is how I have read it to work, anyway, having googled CAIS and had a scout. And I believe this to be correct, as if they could see all six years of historical data via CAIS they sure as heck wouldn't have given me the account and overdraft I now have