Credit Report Factors

vid_k

Hi folks
Checkmyfile score - 790
Experian Score - 590

Apologies for the long thread -

Looked at the experian score and found out the negative attributes. I have no defaults, no ccj's, registered on the electoral roll etc.
1) 11 non mortgage accounts - negative
2) high credit utilization - negative
3) Non mortgage credit - negative
4) No of credit applications in the last 6 months. (2 mortgage applications)

I kind of get no 2 being negative (which in my view only accounts for 35% of the credit scoring pie chart)

What I do not get is the no of non mortgage accounts out of which 6 of them are non banking related such as Phone, utility etc. Why should these contribute to my score. Isn't this a simple case of having i been paying my bills on time or not?

Non mortgage credit - I have a credit card and loan debt amounting to 40k. i understand credit card utilization is a contributing factor, but what about the loans - why should personal loans over 30k be a negative factor as long as i am keeping up with my payments. I also have lots of settled accounts to this regard. But they are classed as negative attributes.

Isnt it for the banks to decide if I can afford the loans or not based on my income rather than the CRA's to decided 30k is the top limit. I am able to afford those payments and my payment history has a proven track record of not missing one payment and settling them as well.

finally if it wasnt for the stupid score - I would have 1 less credit search and 1 mortgage account.
So why should I be penalized based on the perception of a computer?

I am not sure what needs to done out here as I feel I am being unfairly treated by the banks and the CRA's

I have shot off a letter to the CRA with respect to the above - but I am not sure how this can be challenged/taken further if the response is in the negative.

Many Thanks

[Deleted User]

You're under the impression that the CRA score means something.

It doesn't. Lenders will make their own decisions based on your credit file.

boo_star

Deleted_User wrote: »

You're under the impression that the CRA score means something.

It doesn't. Lenders will make their own decisions based on your credit file.

Exactly.

I wouldn't have even bothered writing an email to the CRA to be honest, all you'll get back is some guff about "how lenders may view your file," which is correct.

If they employ imbeciles they may view your file like that. Thankfully most of them don't.

Thrugelmir

vid_k wrote: »

I am not sure what needs to done out here as I feel I am being unfairly treated by the banks and the CRA's

I have shot off a letter to the CRA with respect to the above - but I am not sure how this can be challenged/taken further if the response is in the negative.

Many Thanks

There's nothing in your post to suggest unfair treatment by any banks.

CRA's don't lend money. So what are you complaining about?

I have a credit card and loan debt amounting to 40k

That's your problem. Suggest you worry about what you can do rather than deflect your real problems elsewhere.

Ben8282

I don't really understand why having 11 accounts should in itself be a negative factor. In fact, the existence of utility and home-phone accounts should be a positive factor, so long of course that they are all being paid in full and on time. In principal (and of course within reason) the more accounts the better so long as all are being paid correctly.
I think the 'non-mortgage credit' probably refers to the high amount of such credit. I can't imagine that not having a mortgage is a negative factor (although not being a homeowner could be to some lenders).
I also can't see that settled loans would normally be considered as negative attributes UNLESS they are pay-day loans OR there is an excessive amount of them and unfortunately your statement that there are 'lots' of them make me suspect that one or other or perhaps both of these factors may apply. If you took out a loan from your bank and then made an early full repayment the next month that would be fine ... if you did it once. But if you do it over and over again it is going to start to look very odd indeed.
You are correct that it is for the banks to decide if you can afford the loans or not based on your income rather than the CRA's to decide that 30k is the top limit. But are you saying that a CRA has actually told you that 30K is the top limit?
You have 40k of unsecured credit card and loan debt, over 30k of which you say is made up of personal loans. Having no idea of the APR or term of these loans it is difficult to estimate how much you are paying in repayments every month, but it is certainly a substantial amount. Add on the utility bills and the phone bill and whatever the other credit agreements are and I would imagine it is this which is causing you the problems with your mortgage application with regard to affordability. Just how high is your salary?
I appreciate that you have maintained a prefect credit history ... but still. Lots of paid-off loans? Why did you take out and repay so many over such a short period? Over 30k in personal loans but a comparatively small credit card debt with a high utilisation ratio. I find this situation to be .... unusual. What are your credit card limits and balances and do you just make just the minimum payment every month?
Personally I find your credit profile to be somewhat odd and wonder how somebody with the relatively high level of income that you obviously have managed to build up this level of debt in this particular way? If you believe your creditworthiness to be so good, then why did you go for loans rather than 0% cards?
Clearly your alleged unfair treatment by banks relates only to your mortgage applications as you have made no applications for credit within the last 6 months apart from the 2 mortgage applications. It is good that you have stopped taking out the loans anyway!
My suggestion to you is to postpone your mortgage application and get some of these loans paid off as quickly as you can and not apply for any more.

SnowTiger

vid_k wrote: »

Isnt it for the banks to decide if I can afford the loans or not based on my income rather than the CRA's to decided 30k is the top limit

Yes. And that's what happens; although banks take other things in to consideration, too, including the information on your credit file(s) and other details they know about you.

vid_k

Thrugelmir wrote: »

There's nothing in your post to suggest unfair treatment by any banks.

CRA's don't lend money. So what are you complaining about?



That's your problem. Suggest you worry about what you can do rather than deflect your real problems elsewhere.

Did not mention anything about the unfair treatment of banks and neither was I looking for loans from the CRA's

I did not say I was struggling with payments to be deflecting from the real problems? Sometimes you do have to make intelligent purchases to invest your cash in hand else where. if that means paying a little interest when you can recover that interest in time to come from the initial investment you made.

All I was moaning about is the way the CRA's tend to score you, only have 5 credit (loans and credit cards) accounts and never missed a payment. So why is the number of credit accounts classed as a negative attribute on my profile?

I understand having 90% utilization of your available credit sometimes red flags the banks - but this should improve if I clear my balances or bring it down to 30% of the available credit.

However - is having 2 loan accounts a negative factor?
"If the total amount you owe across all of your non revolving credit (e.g. loans) excluding mortgages is higher than £12,500 your score will decrease."

the above is from experian itself - thats complete bull in my view. How can/will they come up with that 12500 figure - the banks shouldnt be telling them that because if they do - they shouldnt be lending anyone more than that figure without warning the consumers that the credit score will take a hit if they do take more than 12500 in personal loan.

irrespective of what the outstanding loans (non revolving) are/for - as long as we are making repayments on time - why should this be negative factor - let the banks decide if we can afford them not the CRA's putting some points against it?

Also there is nothing else in my report which is classed as negative ie no defaults, no late payments, ccj's etc.

SnowTiger

vid_k wrote: »

irrespective of what the outstanding loans (non revolving) are/for - as long as we are making repayments on time - why should this be negative factor - let the banks decide if we can afford them not the CRA's putting some points against it?

That's what happens.

The comments by the CRA's are only presented to you. Lenders don't see them or your CRA credit score.

vid_k

SnowTiger wrote: »

Yes. And that's what happens; although banks take other things in to consideration, too, including the information on your credit file(s) and other details they know about you.

Completely disagree - the banks will take other things into consideration only when our credit score surpasses their threshold. If your credit rating is classed as poor - why would then even consider considering other things such as your income, outgoings etc etc.

this is exactly where my problem is - the red herring on my report is the number of accounts, high credit utilization (which is already fixed) and total non revolving credit and the credit applications (mortage i made) Obviously in a few months the no of applications will not matter that much. But its the number of accounts and total non revolving credit (fyi - 12500 is the threshold for experian to decrease your score) that is affecting my score currently.

vid_k

SnowTiger wrote: »

That's what happens.

The comments by the CRA's are only presented to you. Lenders don't see them or your CRA credit score.

the banks will take other things into consideration only when our credit score surpasses their threshold. If your credit rating is classed as poor - why would then even consider considering other things such as your income, outgoings etc etc.

[Deleted User]

No banks or lenders or anyone apart from yourself sees your credit score. They can only see the information contained in your report ie what credit accounts you have had, and how you managed them. Each lender will use this information to generate their own internal score for you based on their own criteria, which has nothing to do with the score you see at the CRA.