Credit scores: Relative or absolute?

HeCh

Are the scores generated by the credit agency agencies relative to the scores of others or are they absolute? If I maintain my credit/financial behaviour but others pay down their credit balances, for example, and their scores increase would that then lead to my score decreasing (if that makes sense). Am I purely scored by their algorithm in isolation. Thanks.

[ I acknowledge that the content of credit reference agency files are viewed as the important thing and that the scores generated are just a general guide]

dieselv2

As many will say including Martin today on his show, the score is irrelevant as lenders don't see that. They just look at your lending history for missed payments, defaults, CCJ's, etc. Although your credit file is just one element of the scoring criteria lenders use.

But no if people have better scores, yours won't drop. I used to have 999 and that dropped to 200 with financial difficulties.

[Deleted User]

Doesn't matter.

Superscrooge

I agree it doesn't matter. But it is an interesting thought process and logic tells me you can't be judged in isolation?

Imagine I had a missed payment and nobody else had ever missed a payment. I would have the worst credit file in the country and would surely by in the 'very poor' category?

Now imagine I had a missed payment and everyone else had multiple defaults. I would surely be in the 'excellent' category?

Anthorn

HeCh wrote: »

Are the scores generated by the credit agency agencies relative to the scores of others or are they absolute? If I maintain my credit/financial behaviour but others pay down their credit balances, for example, and their scores increase would that then lead to my score decreasing (if that makes sense). Am I purely scored by their algorithm in isolation. Thanks.

[ I acknowledge that the content of credit reference agency files are viewed as the important thing and that the scores generated are just a general guide]

Depends. The tell-tale advice is that if you want to initiate a change to a credit history and you are successful you only need to do it on one CRA and then it will appear on all of them. So that must mean that CRAs share information.

Overall you get it right: The score you see on CRAs and other services the CRA shares info with is a general guide. Lenders don't see it.

Your "credit/financial behaviour" comes from patterns created in your credit history/report. i.e. Always paying the minimum payment will create a pattern and your financial profile created by individual lenders will state that.

Lastly information in your credit history is unique to you. It doesn't really matter what others are doing. An exception is social profiling which some lenders might score you on. i.e. if all dockers aged 20-30 who are divorced and living in Outer Mongolia default and you are similarly a divorced docker aged 20-30 living in Outer Mongolia you could get a low score no matter what your credit report says.

dieselv2

Lastly information in your credit history is unique to you. It doesn't really matter what others are doing. An exception is social profiling which some lenders might score you on. i.e. if all dockers aged 20-30 who are divorced and living in Outer Mongolia default and you are similarly a divorced docker aged 20-30 living in Outer Mongolia you could get a low score no matter what your credit report says.

Really? Never heard that one before.

Anthorn

dieselv2 wrote: »

Really? Never heard that one before.

Try googling it but don't confuse it with the more in-depth social media profiling which is currently under test in building credit scores. Some experts warn that it could take years to build an accurate social media profile but I suppose once they've got it they can apply it.

Try this link which pretty much provides all-round info on different methods of social credit scoring:
http://www.totallymoney.com/news/social-credit-scores-friends-purchase-history-financial-future/