Credit Score Drops after getting Credit Card

adindas

Did you read my post #15. This is an example how I use that information for my own advantage. Keep in mind that score is built up from algorithm extracted from your credit file, it is not true to suggest it is a make up number. However you will also need to understand its limitation and the game the CRAs are playing (e.g to make you pay for their service). But I never pay for the score.

You play with the CRAs the same with the way you play with your banks. Example stoozing, switching incentive, cashback. Take all incentive give nothing back. Is it not the reason why all of us are here.

You can not tweak the data but you could choose whether to pay for it or not. Choose the free service and ditch it.

m4rc wrote: »

Sorry I don't get your point. So what isn't meaningless about a made up number? The only thing it does is make people feel good or bad, usually bad, and they come on here in a panic.

You can't 'play with the CRAs' - you can't tweak the data, change the details, it's a credit file.

I give up. I actually don't know why I'm bothered, if you all want to believe it means something you will all be pleased to know my magic gnome in the garden has promised to make your numbers all go up a little bit this month because you've all been good boys and girls.

forgotmyname

adindas wrote: »

Did you read my post #15. This is an example how I use that information for my own advantage. Keep in mind that score is built up from algorithm extracted from your credit file, it is not true to suggest it is a make up number. However you will also need to understand its limitation and the game the CRAs are playing (e.g to make you pay for their service). But I never pay for the score.

You play with the CRAs the same with the way you play with your banks. Example stoozing, switching incentive, cashback. Take all incentive give nothing back. Is it not the reason why all of us are here.

You can not tweak the data but you could choose whether to pay for it or not. Choose the free service and ditch it.

Except you can tweak the data they use for your score. Because mostly they do not know if your working and have a bean to your name.
When clearscore started i signed up and put my earnings as 50p and unsurprising i got a low score. Signed the wife up who couldnt even open a bank account and put a silly figure and her score was very high, although she doesnt work.

How can they score you if they do not know if your working and actually have money?

adindas

I suggest you read my whole post #15, #17, #22 to understand my view and where I stand and not look into it in isolation.

In post #17 I clearly mention that you will need to understand their limitation e.g the score does not look into your income, saving, no of defendants, spending habits, etc and other financial information.
Understanding their limitation you will know that you might get a perfect score of 999 while you are not working e.g no income at all, no credit history. You use it for justification to feel good cheating yourself and start applying the prime credit card. When you get rejected you blame the score. But that is the way the algorithm work. Because the information is only extracted to what they could get in your credit file. The fact that you do not have defaults, no miss payment, no CCJs are good things ....

Also to some extents the game the CRAs is playing to look to score looks more attractive and seduce you to pay for this service.

You obsess with the number and start paying for it, you are falling into the trap what exactly the CRAs want you to be. Use for your own advantage, the post #15 is just one example. Let them do the hard work, use it to save your time.

forgotmyname wrote: »

Except you can tweak the data they use for your score. Because mostly they do not know if your working and have a bean to your name.
When clearscore started i signed up and put my earnings as 50p and unsurprising i got a low score. Signed the wife up who couldnt even open a bank account and put a silly figure and her score was very high, although she doesnt work.

How can they score you if they do not know if your working and actually have money?

forgotmyname

I only commented on the "cannot tweak the data" where i showed that you can tweak the data. A pointless exercise yes but it can be done.

A bit like getting a car insurance quote on a small hatch and putting down you a vicar in a small leafy village doing 1000 miles a year, when your a celebrity driving a supercar 50,000 miles a year.

jamesd

Pegasus_1981 wrote: »

anyone else noticed a drop in score when they get a new card or product as its showing 100% available balance and on time payment for the first month?

That's normal. A new application and a new account with more credit available are all initially negative things. The effect of the application and new account will drop over a few months and more gradually over the next year. The on time payments will probably be net positive within six months or so.

Pegasus_1981 wrote: »

Many thanks, do you think i should get rid of this card, the only point of it was to make little payments on like petrol then paying off via the direct debit so i'd get zero interest to boost my score.... Do you think it'll do more harm than good long term keeping it?

You've already paid the credit record price for getting the card but haven't yet had time to see the positive effects of the stream of on time payments. Your plan was good, it's just too early to see the positive effect.

To give you some idea, a few years back I applied for an M&S card but was declined. I phoned them to ask why and they told me that the main reason was a new credit card account I'd opened about six months earlier and they wanted to see more history of what happened now I had that account. I applied again more than a year later and was accepted.

Don't pay too much attention to those asserting that credit scores are meaningless. The are not the full story of what lenders use and there's no shortage of stories where they get things dramatically wrong. They can be useful to indicate trends in how lenders will view what you have been doing and to help you to measure the possible effects of various manipulations that you can carry out through things like making minimum payments or not on cards or opening and closing accounts.

It's not worth paying for a score but it is a tool that can be useful from one of the free ways of getting the number. Since you have a Barclaycard you can probably get the Experian score from them updated every couple of months and they provide a pretty chart showing how it changes.

For a potentially more reliable indication you can also do things like occasionally using credit card tools that use your real credit record to see what your chance are of being accepted for various cards. Those get the acceptance chance from the prospective lenders. There's a cost to the service providers so don't go overboard with this, a couple of times a year would be more than good enough for you to see trends over time.

Pegasus_1981

Hi James,

Thank you for your response, what you say makes perfect sense, after reflecting I probably should have anticipated the drop or tried to factor that in, got my statement for this month which I have already paid off in advance so that's one green tick, i'll keep going as I am, i'm only paying petrol.

Does paying my other CC off at a much faster rate improve my score, minimum payment this month was £17, I've paid £500.00, i plan to do the same for the next few months till its at zero, start balance was 4.8k and will be at zero come year end.

jamesd

There's a flag that most credit card providers report to credit reference agencies which says that you only made the minimum payment. A penny or Pound more than that will prevent the flag from being set and perhaps produce a better score.

Lower amount of used credit improves credit scores. But credit scores exist to be used and if the credit is costing you nothing then you might as well earn some interest on the money until just before the deal ends.

Helvetica_Van_Buren

jamesd wrote: »

Don't pay too much attention to those asserting that credit scores are meaningless.

Definitely ignore your credit score - it's meaningless.

The scores only exist in an attempt to sell you each credit reference agency's 'improve' service. Ask yourself: what would a CRA get out of giving you a score if they weren't trying to sell you something? CRAs are private companies and their product is data - that's why they exist.

CRAs don't make lending decisions and lenders never see your credit score. Even if you printed it off and MADE someone look at it in person it would have zero effect on their lending decision.

So again: definitely ignore your credit score - it's meaningless.

Anyone who tells you they aren't meaningless is mistaken or intentionally lying to you.

jamesd

Please stop lying to people by falsely claiming that credit scores are meaningless. As this site says "Everyone should take time to manage and boost their credit score."

Among other thing they determine the interest rate and credit limit that will be offered by cards that rate for risk when the internal scores used for that are calculated.

The consumer scores from credit reference agencies are not necessarily good predictors of how those internal scoring methods will rate an application because they only use the information in the credit record and don't reflect things like income or the customer preferences of a particular lender. Yet as this site says, those are still "a decent indication of your rough creditworthiness".

That still doesn't mean that it's worthwhile paying for scores from a credit reference agency. It isn't. While the scores are of use those services are primarily offered to make money for the CRA. Do try not to let your dislike for these services cause you to lie about the potential value of the numbers provided.

Helvetica_Van_Buren

jamesd wrote: »

Please stop lying to people by falsely claiming that credit scores are meaningless. As this site says "Everyone should take time to manage and boost their credit score."

Read the link you posted. The headline is misleading because the body of the article then goes on to describe why you shouldn;t worry about your score.

What good is it to 'boost' a score that nobody sees?

jamesd wrote: »

Among other thing they determine the interest rate and credit limit that will be offered by cards that rate for risk when the internal scores used for that are calculated.

No they don't.

jamesd wrote: »

The consumer scores from credit reference agencies are not necessarily good predictors of how those internal scoring methods will rate an application because they only use the information in the credit record and don't reflect things like income or the customer preferences of a particular lender.

Sooo..... shall we agree I was right and CRA scores are worthless? I feel like you might be starting to get it.

jamesd wrote: »

Yet as this site says, those are still "a decent indication of your rough creditworthiness".

I haven't read that link but if it says what you say it says (you were wrong about your other link) then the article is wrong, it's as simple as that.

jamesd wrote: »

That still doesn't mean that it's worthwhile paying for scores from a credit reference agency. It isn't.

Correct - because they're worthless whether you pay money for them or not.

jamesd wrote: »

While the scores are of use those services are primarily offered to make money for the CRA. Do try not to let your dislike for these services cause you to lie about the potential value of the numbers provided.

What a load of waffle. They have no value.

Credit reference agencies don't make lending decisions. Lenders don't see the score.

What aren't you getting about this?