Low Credit Score

karina2011

Hello everyone,

I have a question about Credit scoring, hope someone can help me.

I've been monitoring my credit score for about 6 months as I was refused a loan by my bank. I wanted a loan to consolidate my two credit cards, as the interest was lower but the system showed me as "Adverse Credit". I was surprised as I am not massively in debt.

When I requested my credit report back in May, I had 3 out of 5 stars. it was a "medium" rating. The bank said it was probably because I was sometimes paying the minimum on the cards, rather than over paying, and that I had moved recently so that could have an effect too.

Today, I received the new report, and it's gone down to 2 stars out of 5, making me a "high risk" to lenders!

I never miss a payment, but when I have cash flow problems, I pay off the minimum on some. The bank told me that for my credit to be good, I have to lower my cards so that at least 50% of the credit is available on each. I don't have my cards to the max, I've probably only used 55% of my available credit.

What I don't understand is:if I never miss my payments and overpay when I can, and have no "negatives" in my credit report, why am I a high risk? What's the difference between someone like me, who never misses a payment, and someone who doesn't repay at all??

Thanks for your help

K.

[Deleted User]

What was your score?

karina2011

assj wrote: »

What was your score?

Hi
So I subscribe to ID Aware with Lloyds.
In March my score was 603, and I had 3 stars out of 5

Today, my score is 586 and I have 2 stars

K.

EllaBeagle

What is your credit limit on each card? Do you have any other credit agreements? If there are only two credit agreements on your file it could be a case of your credit report being too 'thin' and although you can get credit for credit cards a loan is a much bigger commitment and this could be why your being refused. I find equifax much easier to understand. Hope this helps.

karina2011

Cards are:

Lloyds: Balance 2,100- Limit is 3,500
Barclays: Balance 4,400 - Limit is 8,000

I dont have anything else. Except an arranged overdraft of 600, which some months I use, others not so much (I'd say on average I go 250 OD..). But never go over my agreed OD.

Normally when I get a bonus I overpay the cards and reduce the balance quite a lot.

I am just confused as to why I would be considered a "high risk" if I don't miss payments.. and I don't have a huge debt.

Mikazaru

How long have you had the cards? Were they previously quite close to the limits? Going back 6 years have you had any missed payments? Do you have a contract mobile? Are you registered on the electoral roll?

karina2011

Mikazaru wrote: »

How long have you had the cards? Were they previously quite close to the limits? Going back 6 years have you had any missed payments? Do you have a contract mobile? Are you registered on the electoral roll?

How long I've had them
Lloyds - since 2006
Barclays - since 2009

Close to limit: Nope

Missed payments. Never

Electoral roll: Yes. I did spend some time abroad in 2010 but then I came back, and moved flat. Now I am back on the electoral roll, with a new address. The bank said this could have affected my credit, but to the point of saying I'm "high risk"?? It's ridiculous...

karina2011

karina2011 wrote: »

How long I've had them
Lloyds - since 2006
Barclays - since 2009

Close to limit: Nope

Missed payments. Never

Electoral roll: Yes. I did spend some time abroad in 2010 but then I came back, and moved flat. Now I am back on the electoral roll, with a new address. The bank said this could have affected my credit, but to the point of saying I'm "high risk"?? It's ridiculous...

And yes, I have a contract mobile. Never missed those payments either.

Mikazaru

I would check one of Equifax or Experian, the ID Aware seems a Lloyd's specific one, to see what they show. I wouldn't have thought the above would mark you as high risk but the score is pretty meaningless to be honest every company will have their own version/scores.

[Deleted User]

Your score seems okay, maybe it's because of what you are using or not using may the case be.

karina2011

Mikazaru wrote: »

I would check one of Equifax or Experian, the ID Aware seems a Lloyd's specific one, to see what they show. I wouldn't have thought the above would mark you as high risk but the score is pretty meaningless to be honest every company will have their own version/scores.

Thank you! I will do that
K.