Why has my credit score dropped dramatically

Bhoy1980

Hi

As early as 3 months ago I had a 4/5 credit rating with the company "callcredit" but I've now seen it drop to the bare minimum 1/5.

I have around 6k worth of debts, spread over 2 credit cards and 2 loans. I never missed a single repayment in all the time I've had this debt or on household bills. I should be debt free in around a year.

Since my high credit score, all I've done is take out a Bank of Scotland credit card and done a balance transfer due to better 0% rates (only one Credit check in a year) . There are a few things that I would like some advise on to see if it may be the reason for the dramatic fall.

— I've reduced the credit limit on my credit card from £2500 to £1500 (I'm at around 80% limit on each card but it's reducing monthly)
— I've done a few cash withdrawals.
— I earn 20k and my borrowing is probably is at its max of what I can safetly afford until debt repaid.
—I've also stopped spending on the credit card but don't know if this is a bad thing even if balance is reducing?


Also when I pay of these loans and credit cards in a year's time, is this likely to increase my credit score and should I keep the credit cards active or close the one with the high interest rates?

Please help as I hope to apply for a mortgage once all debt paid and really need my score to increase.

forgotmyname

Its dropped because its a made up number. Made up by the company selling it to you. Problem is nobody else uses that number. And the company selling it to you know nothing about how much money you earn or have in accounts that dont show on your credit file.

My credt score system is FREE and more reliable. You start off at 5 biscuits. Each time you eat a biscuit your biscuit count decreases.
Guaranteed to be 100% accurate. When your score drops i can sell you more biscuits

[Deleted User]

It means Callcredit aren't prepared to lend you any money.

CLAPTON

Bhoy1980 wrote: »

Hi

As early as 3 months ago I had a 4/5 credit rating with the company "callcredit" but I've now seen it drop to the bare minimum 1/5.

I have around 6k worth of debts, spread over 2 credit cards and 2 loans. I never missed a single repayment in all the time I've had this debt or on household bills. I should be debt free in around a year.

Since my high credit score, all I've done is take out a Bank of Scotland credit card and done a balance transfer due to better 0% rates (only one Credit check in a year) . There are a few things that I would like some advise on to see if it may be the reason for the dramatic fall.

— I've reduced the credit limit on my credit card from £2500 to £1500 (I'm at around 80% limit on each card but it's reducing monthly)
— I've done a few cash withdrawals.
— I earn 20k and my borrowing is probably is at its max of what I can safetly afford until debt repaid.
—I've also stopped spending on the credit card but don't know if this is a bad thing even if balance is reducing?


Also when I pay of these loans and credit cards in a year's time, is this likely to increase my credit score and should I keep the credit cards active or close the one with the high interest rates?

Please help as I hope to apply for a mortgage once all debt paid and really need my score to increase.

credit score are fairly meaningless: the only score that matters is the one a potential lender gives you but they don't tell you


however
reducing your CC limits is probably unwise as your credit % utilisation is now higher


cash withdrawals are reported on your credit files and are generally viewed negatively

once your debts are clear, continue using a CC regularly but pay in full
and, subject to your deposit and affordability, there should be no issues getting a mortgage

Thrugelmir

Bhoy1980 wrote: »

all I've done is take out a Bank of Scotland credit card and done a balance transfer due to better 0% rates (only one Credit check in a year) .

An clear indication that you are rolling debt rather than repaying it.

Tino2385

I've attempted to increase my score on experian for 2 years, (whether or not this is a made up score as described skeptics it does decrease or increase based on the effort you put it to increase it) What has miffed me off is that i've managed over a good 2 years to increase mine from 600 to 803 (999 been max on experian). I then requsted a new card to simply do a balance transfer, on a card i supposedly had "90%" chance of success bade on my report. But this declined.... then within 24 hours my scores went from 803 to 757. Thats a quarter of my points over 2 years gone due to 1 declined search.

So if it's gone down i assume it's due to any credit searches, applications, accounts opened.

YorkshireBoy

Tino2385 wrote: »

Thats a quarter of my points perceived reduction in credit-worthiness by an organisation who doesn't lend money over 2 years gone due to 1 declined credit search.

Corrected that for you.

The_Boss

Skeptics? We're not "skeptics"; we just live in the real world, not Experian's cloud cuckoo land.

Tixy

Tino2385 wrote: »

So if it's gone down i assume it's due to any credit searches, applications, accounts opened.

Starting by ignoring experian's scoring.

If you have very recently made an application for credit then it is likely to make the next potential lender you apply to in a short time fram consider you to be slightly higher risk.

That is because they don't know whether or not that credit application search led to you being accepted or declined or whether you decided to proceed with the application. Therefore you may have just taken on a large financial commitment that they cannot yet see on your credit file and so it is harder for them to assess your ability to afford the new product that you are now applying to with them.

So to take that back to experian's scoring - it does in a way make sense that they drop their score of your credit file after you make an application.

That explanation aside - the credit scores that the credit reference agencies will sell to you are at best a loose attempt for them to quantify how an average potential lender may view just the data on your file with them (but takes no account of lots of pieces of information that a lender uses when making a lending decision).