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

Herbalus

The MSE article seems to give some credence to the idea of Experian's credit score. It says something along the lines of "it doesn't matter if your score has dropped, lenders won't see it". That implies the score is still somehow official.

It would be much clearer if it said: "Experian give you a score based on how they would lend to you, but you don't have to give it two hoots as Experian don't do loans..."

Consumerist

Oblivion wrote: »

I should be the perfect 999. . .

It would seem that you fancy yourself far more than the banks are likely to.

You don't appear to generate any profit for the credit companies - in fact you cost them money - so why should they lend to you?

GingerBob_3

Jnelhams wrote: »

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.

You imply from this that the CRAs have far more information about individuals than even I suspect they have. Credit files held against individuals do not, as far as I know, include anything about your job, your car, your employment history or your health. Are you suggesting the CRAs pull in data from other, unspecified, sources to obtain a score? If so, what sources?

Consumerist

Although not held on credit files, I'm not sure how much of this kind of info is held by the so-called fraud-prevention agencies (e.g. National Hunter) who are looking for inconsistencies in the data you provide to lenders. Lenders also incorporate info from these agencies into their assessment for credit.

KingGooner

Consumerist wrote: »

It would seem that you fancy yourself far more than the banks are likely to.

You don't appear to generate any profit for the credit companies - in fact you cost them money - so why should they lend to you?

I was just about to say something similar. but of course if you are USING the credit cards then you will be making them a little money as they charge the retailer for their use. So to say you are costing them money may be a little over the top.

TRex_2

Hi, I have quite a few unpaid depts from 5 to 10 years ago I haven't paid anything towards for many years. I would like to see my credid file to check if there are any CCJs still on there but when I tried to join the Credit Club to look at my Experian credit score it requires bank account info. Problem is I don't currently have any bank account. My last account was with Natwest in 2011. How can I check whether there are still CCJs in my name? Thanks

PixelPound

Herbalus wrote: »

The MSE article seems to give some credence to the idea of Experian's credit score. It says something along the lines of "it doesn't matter if your score has dropped, lenders won't see it". That implies the score is still somehow official.

It would be much clearer if it said: "Experian give you a score based on how they would lend to you, but you don't have to give it two hoots as Experian don't do loans..."

Actually it's a vindication to all those who post on here saying ignore your score it's irrelevant to the never ending stream of people joining and posting that they need to improve their score.

If experian get an increase in subscriptions, we may see more adjustments in future. :rotfl:

EDIT, just realised I've replied to an old thread that was bumped up to latest threads by the above poster

Consumerist

TRex wrote: »

. . . How can I check whether there are still CCJs in my name? Thanks

If you can't sign up for a freebie (try ClearScore & Noddle) then you can pay £2 each to get them directly from any/all of the CRAs.

TRex_2

Thank you. I had a look at buying the experian credit report but am concerned that they could give details of my address to dept recovery agencies... 'A record of this check will be kept and, with your consent, may be used by other organisations for verification and fraud prevention purposes.' 'We and other organisations may also access and use this information to prevent fraud and money laundering, for example, when:

• Checking details on applications for credit and credit related or other facilities
• Managing credit and credit related accounts or facilities
• Recovering debt'

I am considering opening a bank account so that I can access the Credit Club credit reports , or would Credit Club also give my info to dept recovery agencies? Thank you

Consumerist

TRex wrote: »

. . . I am considering opening a bank account so that I can access the Credit Club credit reports , or would Credit Club also give my info to dept recovery agencies? Thank you

Credit Club will not pass on anything - it's only a gateway to your Experian credit report - but it would seem that any search of your credit file will be recorded by Experian and may, therefore, be seen by debt-recovery agencies.

I'm no expert on debt recovery so perhaps others may be able to help you. You could have a trawl through the <Debt-free Wannabe board> for more info on that subject or even post your question there for help from experienced MSE-users.