Experian admit their "credit score" is pointless since lenders don't see it

Hazzinho

I'm in the credit scores are useless camp, two people could have the same level of debt, lets say £10k, same length of residence and have the same score. Now both of these people want to borrow another £10k. One earns £100k and the other earns £15k, what do you think the outcome will be? Pointless and no guide to credit worthiness, salary to debt ratio is the first thing lenders want to know, you're not going to lend to someone with a perfect 999 score if they've just lost their job.

CherlokHomes

Hazzinho wrote: »

I'm in the credit scores are useless camp, two people could have the same level of debt, lets say £10k, same length of residence and have the same score. Now both of these people want to borrow another £10k. One earns £100k and the other earns £15k, what do you think the outcome will be? Pointless and no guide to credit worthiness, salary to debt ratio is the first thing lenders want to know, you're not going to lend to someone with a perfect 999 score if they've just lost their job.

Now this is what I'm getting at.

You can have a catalogue account and be unemployed yet experian will give this particular customer an excellent score and will also tell this customer that they have a great chance to be accepted for the best card deals out there.

The scores are completely flawed especially as salary is important to credit scoring as petrol is to running a car.

rb10

Hazzinho wrote: »

I'm in the credit scores are useless camp, two people could have the same level of debt, lets say £10k, same length of residence and have the same score. Now both of these people want to borrow another £10k. One earns £100k and the other earns £15k, what do you think the outcome will be? Pointless and no guide to credit worthiness, salary to debt ratio is the first thing lenders want to know, you're not going to lend to someone with a perfect 999 score if they've just lost their job.

Banks have no way of knowing how much you earn without seeing your payslips*. So for bank accounts and credit cards (where payslips tend not to be requested), they pay very little attention to the amount someone has entered on the application as their salary.

This means the decision is almost entirely taken from data from your credit file (which will, in most cases, broadly correlate to the score that Experian provides to consumers) and internal data held about you (most of which will be available through your credit file anyway).

I would note that your post is correct in the case of mortgages, where a lender will take into account income and affordability in addition to credit report data.

* Too many people inflate their salaries on credit applications to make it a good indicator of how much they actually earn.

rb10

Innovate wrote: »

The scores are completely flawed especially as salary is important to credit scoring as petrol is to running a car.

Do you have a source for this claim?

CherlokHomes

rb10 wrote: »

Do you have a source for this claim?

Unemployed and cant afford diesel to get to work.
Employed with a salary and can afford diesel to work.

rb10

Innovate wrote: »

rb10 wrote: »

Do you have a source for this claim?

Unemployed and cant afford diesel to get to work.
Employed with a salary and can afford diesel to work.

That doesn't answer my question, so I assume this means you have no source.

I can assure you that for unsecured products, salary is not an important element of credit scoring. (Source: I used to work in the credit risk function of a major UK bank).

rizla_king

Experian do say on the credit score signup page that.

Derived from your credit report

Your Experian Credit Score is based on the information provided in your Experian credit report and ranges on a scale from 0-999.

The rating scale helps give you an indication of how lenders may interpret your credit report; the higher the score, the lower the perceived risk and therefore the more likely you are to be granted credit along with potential better rates.

If you care to read the highlighted part then it's obvious that it's not what lenders would calculate but is just Experian's assent of how lender "may" score you.

Experian_company_representative

The score we provide to the public is a guide and we make this very clear to people where the score is provided and in our Q&As. It is based on the scores we help many lenders calculate, but doesn't look at the wider range of data a lender would. It is simply designed to help you understand what your credit report might mean to a lender. I don't think that makes it pointless, but people are entitled to their opinion of course.

James

VictimOfImpersonation

Let's hope the Experian credit score is truly pointless, James else Experian are deliberately failing to protect our creditworthiness by failing to clean up their act by lack of obvious data cleansing maintenance and input filters. Is not the general failure I have complained about of the same type that the FOS decision highlighted in this thread sought to rectify?

My file still shows that ridiculous dob check failure resulting in an unchallenged, unalerted fraudulent new credit card account opening which is shortly going to blacken my credit reputation further as soon as the next card provider update hits your database (again unchallenged like the previous two or three updates).

The only thing Experian have used the information for is to mark down my credit score solely reflecting a recent new credit agreement (NOT!).

Has Experian really learned nothing from the decision ?

Experian_company_representative

Please send us your details victimofimpersonation so we can investigate this for you.

Thanks.
James