Experian representative. Your explanation please ...

adindas

There is a case a person has a default and bankruptcy for less than six years, have not dropped off from the file

https://forums.moneysavingexpert.com/discussion/comment/66278629#Comment_66278629

The person still get score 964/1000 average allegedly being 808 ...

look at particularly from Post #1 from OP post #12 by tinkerbell28

I am aware that the credit score will not be seen by lenders and therefore a lot of people argue that this number is meaningless.

But I myself still see one benefit of this score for the experian subscribers (not lender) as people could still use this figure as a montly summary without spending time scrutinizing the detail. Thus, it will save time rather going into detail each month.

So if it drops people could see that there must be something major has happened which they have not realized recently and therefore will spend time to scrutinize finding out what went wrong recently.

But with this occasion, it seems one of the most crucial criteria for lender (e.g Bankruptcy, defaults) has not been taken "seriously" into the equation to generate those magic number. Keep in mind, here we are talking about a person with bankruptcy for less than six years, has not dropped off from the credit file and the person still gets the score of 964/1000 average allegedly being 808/1000.

In the internet people could easily make up or exaggerate the story but experian could also explain to the forum members from its side so people will have a clear figure what is going on ...

Experian_company_representative

The score is an indication of your creditworthiness, that is, the statistical probability of you successfully repaying a new credit agreement based on your credit history. Analysis shows that your most recent credit history is much more relevant than something that happened five or six years ago. So where someone has a default or even a bankruptcy from several years ago, if their most recent credit history shows them managing their finances well then that could lead to them getting a good score. That is based on sound statistical analysis. I guess the challenge for the public and us is that in spite of credit risk calculations some lenders will have policies on past bad debts irrespective of the maths, so may auto decline a past bankrupt even if the score suggests a good risk. The score we provide to the public is intended to help people understand and improve their credit history based on how by lenders calculate risk scores. But you always have to remember that lenders have differing lending criteria and policies. Sometimes you can get insight on this by checking the lender's website before applying.

James Jones

The_Boss

Experian_company_representative wrote: »

The score is an indication of your creditworthiness, that is, the statistical probability of you successfully repaying a new credit agreement based on your credit history. Analysis shows that your most recent credit history is much more relevant than something that happened five or six years ago. So where someone has a default or even a bankruptcy from several years ago, if their most recent credit history shows them managing their finances well then that could lead to them getting a good score. That is based on sound statistical analysis. I guess the challenge for the public and us is that in spite of credit risk calculations some lenders will have policies on past bad debts irrespective of the maths, so may auto decline a past bankrupt even if the score suggests a good risk. The score we provide to the public is intended to help people understand and improve their credit history based on how by lenders calculate risk scores. But you always have to remember that lenders have differing lending criteria and policies. Sometimes you can get insight on this by checking the lender's website before applying.

James Jones

So what are your thoughts on your current advertising campaign that starts with the words "Your credit score is yours" that is directly telling people that they have a credit score, which as you confirm above is just fraudulant lies?

GingerBob_3

I'm no fan of the CRAs, but the explanation given above by JJ is, in my opinion, a good one and accurately reflects the nature of a credit score.

However, I too would question the notion of ownership relating to "your score", or worse "your file". It's not "your" file, it's their file about you.

dumpyboy

The one thing I do agree here is that credit score number is meaning less I have 999 can not get nothing other then a very basic bank account turn down for a phone contract so what do 999 mean?

The_Boss

dumpyboy wrote: »

The one thing I do agree here is that credit score number is meaning less I have 999 can not get nothing other then a very basic bank account turn down for a phone contract so what do 999 mean?

It means "Hello, police? I'd like to report a theft of my money by Experian"

Thrugelmir

Experian_company_representative wrote: »

I guess the challenge for the public and us is that in spite of credit risk calculations some lenders will have policies on past bad debts irrespective of the maths,

That's precisely the reason why lenders advance money, and Experian sell data. Maths alone isn't the way to conduct banking business.

NPHammer

Experian_company_representative wrote: »

The score is an indication of your creditworthiness, that is, the statistical probability of you successfully repaying a new credit agreement based on your credit history. Analysis shows that your most recent credit history is much more relevant than something that happened five or six years ago. So where someone has a default or even a bankruptcy from several years ago, if their most recent credit history shows them managing their finances well then that could lead to them getting a good score. That is based on sound statistical analysis. I guess the challenge for the public and us is that in spite of credit risk calculations some lenders will have policies on past bad debts irrespective of the maths, so may auto decline a past bankrupt even if the score suggests a good risk. The score we provide to the public is intended to help people understand and improve their credit history based on how by lenders calculate risk scores. But you always have to remember that lenders have differing lending criteria and policies. Sometimes you can get insight on this by checking the lender's website before applying.

James Jones

While I actually agree that the some of the reasoning you have used here is sound, it doesn't reflect the way the vast majority of mainstream lenders make their decisions. Very few would lend to someone with a default or bankruptcy in the last 5 years.

If Experian scores do not reflect lenders policies, what value do they hold?

Finally, as long as any credit score doesn't factor in your income it will be missing a vital criteria lenders take into account and therefore in my opinion will never give an accurate assessment that can be of any real value.