Experian, Equifax and Noddle 'scores' and 'ratings' have little value

edited 17 May 2013 at 10:31AM in Credit File & Ratings
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The_BossThe_Boss Forumite
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edited 17 May 2013 at 10:31AM in Credit File & Ratings
Pasting this as the number of threads every day is ridiculous.

For people purchasing their 'credit score' from the likes of Experian, Equifax and Noddle - please do not pay extra for this. The same goes for any 'ratings'. Reviewing your credit file is sufficient for you to see if you need to take action that will make you more credit worthy in the eyes of lenders.

The Experian, Equifax and Noddle scores and ratings are not at all accurate because...

1) Lenders do not use Experian, Equifax and Noddle scores. Each lender has different criteria that they use to determine whether they accept new customers and they use data from your credit file to do so in conjunction with information not held by CRAs that they ask for in your application.

2) They do not take into account your salary

3) They do not take into account your time with current employer

4) They do not consider your time with current bank

5) They do not include outgoings (such as rent) which some lenders do

6) The 'scores' are just a vague indication and not worth the money you pay for them because different lenders will assess you in different ways.

What you can do to improve how lenders perceive you is below.

1) Always keep within your credit limit
2) Always pay at least the minimum by the due date (direct debit is best for this)
3) Try to pay a bit more than the minimum to avoid a 'minimum payment' marker on your account's file
4) Try to avoid using more than 50% of the available credit on your cards
5) If you want to close cards, keep them for at least a year and ideally close newer accounts before older accounts. Older accounts show stability.
6) Do not apply for several cards/loans within a short periodbof time.
7) If your combined credit limits are > 75% of your salary then lenders tend not to want to provide further credit. This threshold varies from lender to lender.

Credit report data (not scores) is very useful. You do not need to pay for your 'score' to review this data. It can be obtained for £2 as a 'statutory report'. Check the following on your report

1) That you are on the electoral roll
2) That all your accounts are showing (though some opened before 2001 may not)
3) That your previois addresses are listed
4) That you are not listed with a financial association with anything else
5) If you have had defaults with a default date of > 6 years ago, it should no longer be showing
6) That all accounts reported are yours and not somebody else. Raise with the CRA if anything not related to you is reported.
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  • The_BossThe_Boss Forumite
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    Could this be made a sticky thread?
  • ValHallerValHaller Forumite
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    The_Boss wrote: »
    6) The 'scores' are just a vague indication and not worth the money you pay for them because different lenders will assess you in different ways.
    In particular, mortgage lenders will score very differently from consumer credit lenders.

    And some of the measures people take to improve their so-called 'credit-score', such as taking out credit cards and leaving a balance on them are likely to harm any mortgage application.
    You might as well ask the Wizard of Oz to give you a big number as pay a Credit Referencing Agency for a so-called 'credit-score'
  • The_BossThe_Boss Forumite
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    ValHaller wrote: »
    In particular, mortgage lenders will score very differently from consumer credit lenders.

    And some of the measures people take to improve their so-called 'credit-score', such as taking out credit cards and leaving a balance on them are likely to harm any mortgage application.


    Yep. When an ex got her mortgage previously they would only offer it upon confirmation from the lender that she had paid off a £8k credit card balance. I know others who have also had a similarly conditional offer.
  • ValHallerValHaller Forumite
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    The_Boss wrote: »
    Credit reports however are extremely useful. What you can do to improve how lenders perceive you .....
    Don't forget these basics.
    • Make sure all your addresses for at least 3 years are recorded
    • Make sure you are on the electoral role (IIRC this is recorded on your credit file)
    • Close joint accounts and sever all financial links with ex's, parents, brothers and sisters or anyone whose financial delinquency could find its way on to your file
    • Never take out credit in your name for someone else (mobile phones and catalogues are common for this) on the understanding that they will pay. If they have to choose between trashing your record or theirs, they will trash yours every time. Or if you must do it, make the payments yourself and accept that you may have to pay from your own pocket.
    You might as well ask the Wizard of Oz to give you a big number as pay a Credit Referencing Agency for a so-called 'credit-score'
  • Hi im a newbie and was thinking of looking into my credit as they have a freebie but it scares the hell out of me if i do a free one will any of the people who i may owe money to see my current address?
  • The_BossThe_Boss Forumite
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    ValHaller wrote: »
    Don't forget these basics.
    • Make sure all your addresses for at least 3 years are recorded
    • Make sure you are on the electoral role (IIRC this is recorded on your credit file)
    • Close joint accounts and sever all financial links with ex's, parents, brothers and sisters or anyone whose financial delinquency could find its way on to your file
    • Never take out credit in your name for someone else (mobile phones and catalogues are common for this) on the understanding that they will pay. If they have to choose between trashing your record or theirs, they will trash yours every time. Or if you must do it, make the payments yourself and accept that you may have to pay from your own pocket.

    Cheers. Will do when I am next on my PC.
  • The_BossThe_Boss Forumite
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    Hi im a newbie and was thinking of looking into my credit as they have a freebie but it scares the hell out of me if i do a free one will any of the people who i may owe money to see my current address?

    Yes they will, but why does it scare the hell out of you? Surely you're going to repay it?
  • OneLife_OneShotOneLife_OneShot Forumite
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    I am with you Boss, everyday the same thread 5 times about this. People just don't seem to get it.
    "All truths are easy to understand once they are discovered, the point is to discover them."


  • Hi All,

    I have been working for sometime to improve my credit rating - seeing this makes me wonder if half the things I did were worth it! I too have apparently been duped by experian into giving them my hard earned cash over the last year. To see that their "score" and that of equitrack and noddle are next to useless makes me more than a little annoyed!.

    It has always confused me as to why experian show me as having a good/excellent score, and that with the same information, noddle shows me as having a 1/5 score. Equitrack is usually in the middle of the two.

    One thing that I noticed above, was that I should sever all ties to anyone I am linked to that could harm my credit rating. I am linked to my father on my credit report, and he has a history of bad credit. We have not lived at the same address for 6 years now - would it still be prudent to have him removed from my credit history? How would I go about this?

    Also - Is there anything else I can do to increase my lendability? I have 2 current accounts (one joint, one my own) both with overdrafts that are kept below 50% of the limit. I have a credit card that i recently increased the limit on, purely because experian told me the "low" limit of 800 (800 is ALOT to me lol) showed me as a higher risk to lenders. The limit is now 1500, and has about 300 owing on it. Always pay triple the minimum payment. no missed/late payments in the last 2 years. A loan that has had no missed/late payments on it in the last 4/5 years, nearly paid off now. No ccj's, no bankruptcies, no defaults. about 7 settled accounts with very good history. I have had my credit card for 8 years now too.

    Any advice greatly appreciated!

    Just going to cancel my experian subscription :T
  • The_BossThe_Boss Forumite
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    Bumping this as credit scores are being discussed on the Martin Lewis show tonight so no doubt there will be some confused people. Hopefully Martin will highlight the bits that Experian deliberately withhold.
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