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What your credit score really means

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  • DCFC79
    DCFC79 Posts: 40,641 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    daveybilko wrote: »
    Does a company have to tell you which score they use then before I apply for a card if the scores are different?

    Short answer is no.

    How would you knowing which agency they use help the lender ?
    Just think about it for a second, if they tell you which agency they use you could manipulate the credit history on that particular agency.

    They will use whichever/ if any of the credit ref agencies they like, it could be none, 1, 2 or 3, its up to them.
  • Askalaba
    Askalaba Posts: 61 Forumite
    Second Anniversary Debt-free and Proud!
    Does anybody know if opening a new bank account will lower your credit score?
    Absolutely love a good bargain. If anybody has any money saving tips please send them my way :j
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    Yes, but it doesn't matter.

    Lenders won't be concerned.
  • Askalaba wrote: »
    Does anybody know if opening a new bank account will lower your credit score?

    Does anyone know if reading other posts answers your question before posting?
  • Jasond
    Jasond Posts: 14 Forumite
    First Anniversary
    and this post makes no sense in the fact it says "no lenders use credit score" I call BS as ive just had natwest use my credit score to lend for a mortgage... so that blows that theory out the water...
  • sourcrates
    sourcrates Posts: 31,597 Ambassador
    Part of the Furniture 10,000 Posts I've been Money Tipped! Name Dropper
    edited 3 June 2019 at 12:10PM
    Jasond wrote: »
    and this post makes no sense in the fact it says "no lenders use credit score" I call BS as ive just had natwest use my credit score to lend for a mortgage... so that blows that theory out the water...


    Hi there,


    It can be quite complicated all this talk of various credit scores, let me try and explain it this way, the credit score you see on your credit report, is one generated by that particular credit reference agency, its a number no one else see`s, its based on how your report looks to them, they use that number to try and sell you credit improvement products, its basically a marketing gimmic.

    The number a lender will use is there own, based on how much risk they percieve you to be, they run there own credit checks, using there own scoring system, not the number you see on your credit report, although the two may be similar.

    Every lender scores you using there own scoring system, but still using the 3 regular credit reference agencies, so they can generate a score from each one.


    Hope that helps clarify things a bit.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter
  • phugar
    phugar Posts: 1 Newbie
    edited 11 June 2019 at 4:44PM
    Some of the "credit scores are completely meaningless" replies here have actually infuriated me enough to set up an account to respond.

    I've worked in consumer lending for the last ~10 years and have experience building and implementing credit scoring models for a range of lenders. While many will indeed use their own proprietary scoring methods (using the raw credit history data from one or more of the 3 agencies), it's often the case that smaller lenders will use off-the-shelf scores, which will in fact be very similar to the ones many consumers can see.

    The blanket response of these scores being meaningless doesn't tell the full story, and to be honest the article should be updated to reflect this. There are many factors, including the sophistication of the lender & the exact integration with the bureaus (one or multiple, fallbacks, time period restrictions,API hookups...)
  • phugar wrote: »
    Some of the "credit scores are completely meaningless" replies here have actually infuriated me enough to set up an account to respond.

    I've worked in consumer lending for the last ~10 years and have experience building and implementing credit scoring models for a range of lenders. While many will indeed use their own proprietary scoring methods (using the raw credit history data from one or more of the 3 agencies), it's often the case that smaller lenders will use off-the-shelf scores, which will in fact be very similar to the ones many consumers can see.

    The blanket response of these scores being meaningless doesn't tell the full story, and to be honest the article should be updated to reflect this. There are many factors, including the sophistication of the lender & the exact integration with the bureaus (one or multiple, fallbacks, time period restrictions,API hookups...)

    But still, lenders do not see the score/number generated by the CRA's that the consumer sees.
  • boo_star
    boo_star Posts: 3,202 Forumite
    Part of the Furniture 1,000 Posts
    phugar wrote: »
    Some of the "credit scores are completely meaningless" replies here have actually infuriated me enough to set up an account to respond.

    I've worked in consumer lending for the last ~10 years and have experience building and implementing credit scoring models for a range of lenders. While many will indeed use their own proprietary scoring methods (using the raw credit history data from one or more of the 3 agencies), it's often the case that smaller lenders will use off-the-shelf scores, which will in fact be very similar to the ones many consumers can see.

    The blanket response of these scores being meaningless doesn't tell the full story, and to be honest the article should be updated to reflect this. There are many factors, including the sophistication of the lender & the exact integration with the bureaus (one or multiple, fallbacks, time period restrictions,API hookups...)

    The reality is that the number of "smaller lenders" that ever get talked about in relation to being denied credit on these forums is so miniscule that it's not even worth taking into account.

    I honestly can't remember the last time anyone came on here complaining about being denied credit due to their credit score by anyone small enough to not use their own scoring algorithms.

    It's far easier for everyone to just forget they even exist.
  • DCFC79
    DCFC79 Posts: 40,641 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    edited 4 July 2019 at 7:10AM
    Your credit score combines everything in your credit report into a tidy, three-digit number that serves as a gauge for lenders as to where your credit stands and serves to calculate risk at a point in time. It can determine whether you are approved for a credit card or a big loan such as a car or home, as well as how much you’ll pay for these things. While your score fluctuates depending on what’s happening in your financial life, the higher your score the better.
    Credit scores range from 300 to 850. Good to excellent credit scores are typically 700 and above. When you're in this range, you are considered a low risk for defaulting on loans as well as scoring high on the responsibility chart. Fair credit means your score is between 660 and 700
    Credit scores are used by lenders, including banks providing mortgage loans, credit card companies, and even car dealerships financing auto purchases, to make decisions about whether or not to offer your credit and what the terms of the offer (such as the interest rate or down payment) will be. There are many different types of credit scores. FICO® Scores* and scores by Vantage Score are two of the most common types of credit scores, but industry-specific scores also exist.

    Except credit scores arent seen by lenders ?
    Only you can see your own score, well in the uk anyway, US might be different.
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