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

matttye

The_Boss wrote: »

My Noddle credit score :rotfl:



Not been turned down for anything since 2006 :rotfl: always got good rates i.e. on 2 loans and also promo offers on the 11 cards I have been accepted for since.

Maybe I should obtain a couple of defaults to improve my 'score'?

Mine is 2/5, just improved from 1/5, presumably because I now have a credit card.

I have two defaults and I've been rejected for lots of things in the last couple of years. According to Noddle you're only one bracket above me!

datlex

There is some value in credit scores in that they can give you an indication of whether it is worth applying. For example last year I wanted to change from a prepaid meter to a credit meter. By checking my score I was able to argue my case for having one.

Of course they have to be considered in conjunction with other factors such as salary, out goings (some mortgages and loans take into consideration things like gas elec, travel expenses, food etc), available credit history and use of available credit. They are part of the whole picture a lender needs to decide whether you are A) likely to pay it back B)likely to make them money.

The_Boss

MoneySaverLog wrote: »

I would have thought so.

Glad Martin explained it better last night, at the start of the second half, regarding credit ratings, lender scores and CRA scores.

To be fair to Martin, I think it was positive that he tried to address the issue on the following program. It's a shame he couldn't say these things directly to Experian or with Experian present so they could justify why they deliberately mislead with regards to the scores, but I doubt he'd want to upset James Jones.

The_Boss

This thread needs to be bumped...

Experian_company_representative

Only just seen this. I had plenty to say on the Martin Lewis Money Show but most was a casualty of the edit as it's Martin's show not mine!!

I do spend a lot of time on here explaining and discussing the Experian Credit Score. Our website also makes it clear what this score represents.

Contrary to misleading comments by some posters, lenders DO obtain scores from the CRAs. We have been the leading provider of scoring solutions to UK lenders for over 25 years and, I believe, pioneered credit scoring in the UK in the early 80s.

The scoring logic we use in the Experian Credit Score reflects the scorecards we help many major lenders build. BUT, and as I've said on here many times before, lenders' scores usually assess a wider selection of data and will be customised to their own policies. It’s for these reasons that none of us has a ‘credit rating’.

On a simplistic level, and in terms of credit risk, this is typically what's assessed:

Lender's scoring system
-your own credit report
-your financial associates' credit reports
-your application form data (job, salary, marital status etc)
-lender's own records on existing or past customers
-aggregated geo-demographic data (type of neighbourhood you live in and so on)

Experian Credit Score (ECS)
-your own credit report

So the ECS is only part of the picture, but it is an important part and if we can help people gauge how their credit history shapes up in terms of a typical lender's scorecard then I think that's a very useful guide.

What I think is a challenge is that there are usually two main elements to a lender's credit report risk assessment 1) the overall score assessing multiple characteristics not individually predictive of risk and 2) individual policy rules that highlight specific things that are individually predictive, such as a CCJ/court judgment.

Examples of the latter can be isolated from the general score and used in the decision logic to move to a specific outcome (accept, refer, decline) irrespective of the general score. The ECS does I think do this for certain entries, which probably explains the occasional apparent anomaly ie someone with serious adverse entry getting a decent score. So we have been working to make this clearer on the website. Most people don't have serious adverse entries on their reports though and can therefore be helpfully guided by the ECS alone in terms of how their report is likely to affect a typical decision to lend.

I hope that helps.

James

JohalaReewi

Experian_company_representative wrote: »

I do spend a lot of time on here explaining and discussing the Experian Credit Score. Our website also makes it clear what this score represents.

It is not a credit score.
You are not providing credit so it is just an Experian score.

On a simplistic level, and in terms of credit risk, this is typically what's assessed:

Lender's scoring system
-your own credit report
-your financial associates' credit reports
-your application form data (job, salary, marital status etc)
-lender's own records on existing or past customers
-aggregated geo-demographic data (type of neighbourhood you live in and so on)

Experian [STRIKE]Credit[/STRIKE] Score (ECS)
-your own credit report

So the ECS is only part of the picture, but it is an important part and if we can help people gauge how their credit history shapes up in terms of a typical lender's scorecard then I think that's a very useful guide.

QED.

Lenders may also use credit reports from other agencies instead of (or as well as) Experian. Such as Equifax, Call Credit, National Hunter, etc.

You-kip

Experian does calculate scores for Lenders but Unfortuantly you'll have to be some kind of Mug if you think the scores they sell the Public are the same as the ones they sell to lenders.

Experian's scores they sell are a great buisness for their profits especially if you're a monthly subscriber but the reality is you might as well get a calculator out and bash some numbers in.

The_Boss

Experian_company_representative wrote: »

The scoring logic we use in the Experian Credit Score reflects the scorecards we help many major lenders build. BUT, and as I've said on here many times before, lenders' scores usually assess a wider selection of data and will be customised to their own policies. It’s for these reasons that none of us has a ‘credit rating’.

On a simplistic level, and in terms of credit risk, this is typically what's assessed:

Lender's scoring system
-your own credit report
-your financial associates' credit reports
-your application form data (job, salary, marital status etc)
-lender's own records on existing or past customers
-aggregated geo-demographic data (type of neighbourhood you live in and so on)

Experian Credit Score (ECS)
-your own credit report

So the ECS is only part of the picture, but it is an important part and if we can help people gauge how their credit history shapes up in terms of a typical lender's scorecard then I think that's a very useful guide.

Can you point out where on the page(s) that promotes sign up and payment for the Experian credit score it explains this?

matttye

Experian_company_representative wrote: »

Only just seen this. I had plenty to say on the Martin Lewis Money Show but most was a casualty of the edit as it's Martin's show not mine!!

I do spend a lot of time on here explaining and discussing the Experian Credit Score. Our website also makes it clear what this score represents.

Contrary to misleading comments by some posters, lenders DO obtain scores from the CRAs. We have been the leading provider of scoring solutions to UK lenders for over 25 years and, I believe, pioneered credit scoring in the UK in the early 80s.

The scoring logic we use in the Experian Credit Score reflects the scorecards we help many major lenders build. BUT, and as I've said on here many times before, lenders' scores usually assess a wider selection of data and will be customised to their own policies. It’s for these reasons that none of us has a ‘credit rating’.

On a simplistic level, and in terms of credit risk, this is typically what's assessed:

Lender's scoring system
-your own credit report
-your financial associates' credit reports
-your application form data (job, salary, marital status etc)
-lender's own records on existing or past customers
-aggregated geo-demographic data (type of neighbourhood you live in and so on)

Experian Credit Score (ECS)
-your own credit report

So the ECS is only part of the picture, but it is an important part and if we can help people gauge how their credit history shapes up in terms of a typical lender's scorecard then I think that's a very useful guide.

What I think is a challenge is that there are usually two main elements to a lender's credit report risk assessment 1) the overall score assessing multiple characteristics not individually predictive of risk and 2) individual policy rules that highlight specific things that are individually predictive, such as a CCJ/court judgment.

Examples of the latter can be isolated from the general score and used in the decision logic to move to a specific outcome (accept, refer, decline) irrespective of the general score. The ECS does I think do this for certain entries, which probably explains the occasional apparent anomaly ie someone with serious adverse entry getting a decent score. So we have been working to make this clearer on the website. Most people don't have serious adverse entries on their reports though and can therefore be helpfully guided by the ECS alone in terms of how their report is likely to affect a typical decision to lend.

I hope that helps.

James

Out of curiosity, is there a reason why Experian doesn't allow customers to enter salary, job status, marital status etc. to improve the accuracy of the score?

I can have the best credit history in the world, but if I'm unemployed it's unlikely anyone will want to lend to me.

matttye

The_Boss wrote: »

Can you point out where on the page(s) that promotes sign up and payment for the Experian credit score it explains this?

On the homepage there's a link that says "What is a credit score?" that leads to this page:

http://www.experian.co.uk/consumer/what-is-a-credit-score.html

There's nothing on that page I would consider false or misleading - I think they're getting better in this regard. Surely people should be doing research before getting to the order page