New credit card 120 points wiped of credit score.

RCP90_2

Hello Everyone

I often come here for advice but have never had to ask a question until now

As many people my credit score has been pretty bad for a while now and over the past 18 months I have paid off the debt and had slowly increased my Experian credit score to 790 from about 300, which i was very pleased with.

I was accepted for a Capitol one credit card, which gave me a £500 credit limit. The only reason i applied for this card was simply to try to increase my credit score further.

I have used the card very lightly, and never gone anywhere near the limit, and paid the balance in full, on time every month for 4 months

So I decided to go and check my report, expecting it to have increased, and was completely shocked to see that it has dropped to 640, and that I now has a 'poor' credit rating.

The reason was apparently because I had applied for more credit ( just the card) and because I had been given a low credit limit!.

Is this normal??!!!


Thanks in advance

[Deleted User]

Yes. But also largely irrelevant as your credit score is based on the combined age of the last 3 lottery winners, or something like that.

A new line of credit will aways increase your risk rating slightly in the short term, but medium term wil be fine.

aleph_0

RCP90 wrote: »

Hello Everyone

I often come here for advice but have never had to ask a question until now

As many people my credit score has been pretty bad for a while now and over the past 18 months I have paid off the debt and had slowly increased my Experian credit score ...

The Credit score is a worthless calculation, and certainly not worth paying for. Just keep on paying your cards on time and build up a decent history of behaviour. All that's happened is the (worthless) score has been adjusted since applying for lots of things at the same time is bad, so you might be in a weaker position when applying for something in the short term, even though in the long term you will be in a stronger position.

pheonixrising21

A recently opened new credit account will make you a slightly riskier proposition to other lenders as you now have access to £500 more credit than you did before.

However, the actual score that Experian/Equifax give you is irrelevant (as others have said) and is a complete waste of money. All lenders have their own scoring systems, based on different thresholds of the variables (payment history, electoral role, salary, amount of available credit, credit balance, etc, etc). Lenders only look at the information available on your report, not the score.

I'd cancel your Experian subscription immediately and get a copy of your statutory credit report every 2-3 months or so. It will cost you £2 per copy from each CRA and will contain all the information that the lenders will see. Put the cash you save towards your remainder of your debts

opinions4u

Insert random number between 500 and 999.

Deduct random number between 1 and150 for each search within the last month.

Output: Credit score.

That will be £14.99 please. Every month.

(Then you can see another random number between 1 and 50 getting added each month for 3 months while your search ages, subject to an overall cap of 999)

The_Boss

If a mod is reading, can we have a sticky thread about the meaninglessness of these scores please? It seems we are getting at least one new thread per day from someone either complaining about their score or conplaining about being refused when they have a good score.

SuperAllyB

opinions4u wrote: »

Insert random number between 500 and 999.

Deduct random number between 1 and150 for each search within the last month.

Output: Credit score.

That will be £14.99 please. Every month.

Sounds useful. Where do I send the payments? Or would you rather I agreed to a CPA then came on here wondering why you are taking my money?

BugsyBrowne

The_Boss wrote: »

If a mod is reading, can we have a sticky thread about the meaninglessness of these scores please? It seems we are getting at least one new thread per day from someone either complaining about their score or conplaining about being refused when they have a good score.

This is an excellent idea and been mentioned before but I'm sure Experian & MSE have some sort of deal going on together.

The_Boss

BugsyBrowne wrote: »

This is an excellent idea and been mentioned before but I'm sure Experian & MSE have some sort of deal going on together.

I've started a thread that I'd appreciate feedback on and will edit as comments are received. Perhaps if this will not be made into a sticky we can just provide the link whenever someone quotes the credit score.