MSE News: Experian shakes up how it calculates credit scores: what it means

edited 11 August at 2:04PM in Credit File & Ratings
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Former_MSE_PalomaFormer_MSE_Paloma
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edited 11 August at 2:04PM in Credit File & Ratings
Experian has shaken up the way it calculates people's credit scores meaning many suddenly dropped or increased...
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Experian shakes up how it calculates credit scores: what it means

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  • ConsumeristConsumerist Forumite
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    Proof, if any was needed, that Experian's guess at a score is of little consequence beyond a general guide.

    Paying for an Experian score is a bit like paying someone to throw the dice for you at a gaming table.
    >:)Warning: In the kingdom of the blind, the one-eyed man is king.
  • JuicyJesusJuicyJesus Forumite
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    They are a waste of money anyway, and of no consequence to anything.

    I noticed today that Barclaycard are offering them for free. I'm getting it for the amusement factor.
    urs sinserly,
    ~~joosy jeezus~~
  • ConsumeristConsumerist Forumite
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    JuicyJesus wrote: »
    . . . I noticed today that Barclaycard are offering them for free. I'm getting it for the amusement factor.
    Good news for Barclaycard customers.

    I notice that the <FCA investigation> into the credit-card market is looking for ways to enable customers to be able to shop around without damaging their credit file. This could become a trend for all credit cards which will be good news for customers. No doubt Experian will be objecting all over the place.
    >:)Warning: In the kingdom of the blind, the one-eyed man is king.
  • forgotmynameforgotmyname Forumite
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    Damn, I was just sorting out my own credit scoring system and hoping to go live with it next year. I only sent off the emails to the biscuit manufacturers the other day.

    I must admit its harder than most people realise, trying to score people accurately. Are you more likely to get accepted if your rating is a fig roll or a hobnob?
    Censorship Reigns Supreme in Troll City...

  • ThrugelmirThrugelmir Forumite
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    Good news for Barclaycard customers.

    I notice that the <FCA investigation> into the credit-card market is looking for ways to enable customers to be able to shop around without damaging their credit file. This could become a trend for all credit cards which will be good news for customers. No doubt Experian will be objecting all over the place.

    Borrowers should be more more concerned with the wider implications of the review. As with mortgages "affordable" borrowing will be a game changer.
    It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong." — George Soros
  • msallenmsallen Forumite
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    The penultimate paragraph in the MSA article seems to have had some extraneous words added. Its much more accurate without "of 13 different elements." on the end.
  • Here you go Experian just use this...

    https://www.random.org/

    The results are just as useful as your score.
  • JnelhamsJnelhams Forumite
    1.4K Posts
    The credit scores are "calculated" and I use that word loosely, behind a basic algorithm that weights a number of factors to create a credit score, and each agency uses it's only little bit of magic to come up with this magic number. The factors they use, are mainly as follows:
    1) Do you own a property out right?
    2) If you have a mortgage, how much of the property do you own?
    3) What area is it in compared to map of economic blackspots, i.e. is it in a horrible area.
    4) Do you pay it on time?
    5) Payment patterns of all your bills that you pay, such as Gas, Electric, Water, Mobile/House phone, catalogues, on line shops, any where that has an agreement to supply data to agencies. - They score you if you are late or not, and how much total credit you have versus debt.
    6) Are you on the electoral role and how long - if you move a lot that messes up the score.
    7) What job you do, the riskier or in an industry that is poorly paid or unstable such as shop workers, and call centres mean you get a worse score.
    8) Your age, the less time you have at work means less time to pay of debts.
    9) What Car you have and any loans on it.
    10) Bank account balance if it fluctuates into the red each month, that can be bad.
    11) Employment history, yes if you change jobs a lot and there are gaps in employment, that hurts.
    12) CCJ's and debt collections of course are a big no no.
    13) Health - yes, they will deny it but they know from the insurance companies if you have any claims on the go.
    14) How much credit and how many applications for credit you have made in the last few weeks.

    The agencies used to base your score on who lived there before you! That is not as irrational as it sounds, as properties can present trends, i.e. Students are always a risk, and if you live in such a property used by students, chances are you could be too. They are not allowed to do this now, as it is of course unfair, but for a long time someone who was a bad payer at your address would be a big no no.

    Each agency weights the answers to the points above differently and also in relation to whom they are providing the information to. A credit card company, will be more interested in your total credit exposure and employment record, than where you live, Whilst of course a Car company or Mortgage provider is more interested in where, so that the car won't be vandalised until it's paid for.

    The agencies use to hire teams of analysts in the far east to check these scores, now it's all by computer, and a handful of analysts will look again at any appeals, and it is worth challenging a score, because it is easy for the data used to be wrong or old. NEVER PAY FOR A CREDIT REPAIR!!! these are bogus, and a SCAM. You can write to the agencies to provide corrections or place an explanation for an event on to your credit file to help your score.
    My Mind wanders, if found please return.
  • patannepatanne Forumite
    1.3K Posts
    Their turnover has obviously dropped due to sites like this. So they have done a re-jig of the numbers to make more people waste their money paying them for useless info. Just another meaningless form of advertising.
  • OblivionOblivion Forumite
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    I should be the perfect 999. Never had any debt, all bills always paid before due date, lived in the same property mortgage free for over 40 years, on the electoral register, always pay my credit card off in full each month .... and yet I score 931. Utterly useless system. Experian are a bloody joke!
    ... Dave
    Happily retired and enjoying my 14th year of leisure
    I am cleverly disguised as a responsible adult.
    Bring me sunshine in your smile
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