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Why is it so stressful?

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  • kingstreet
    kingstreet Posts: 39,256 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • PixelPound
    PixelPound Posts: 3,058 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    crazyfj wrote: »
    As someone that has worked in this area. All companies adjust scores to market needs. A bank will have mutiple algorithms for products. All can be increased or reduced due to market pressures, company profits and product. Existing customers will also have a score. You should use the 3 credit reporting tools to make sure your report is correct. If you have a lower score it does not mean you will never get credit.

    I would never suggest to anyone if they have a lower score they will not get credit. That's simply not the case. While you can use the system as baseline. Lower scored people are certainly not barred from credit. Many companies offer tailored products for these scores and high apr due the increased risk.
    Unfortunately many people focus purely on the score, hence all the "how can I improve my score" threads, rather than what their reports contain. The CRA's have different algorithms which is why a change in your credit status may be reflected differently on each, and as you say companies have their own algorithms that may mean they judge people differently.

    There seems to be a lot of posts either saying the score is irrelevant or it isn't, both really are an over simplification. People shouldn't focus on what their score is, but what it means both as to whether they should scrutinise their report and to tailoring their applications for credit to those likely to accept them. I remember in pre-CRA days when there were really good loan offers or credit card offers but you had to be mindful that if you applied to one with a high threshold a decline could mean you may also increase possibility of been rejected for ones with a lower threshold. We now have access to more information so that we can better tailor applications to the right products, unfortunately it has resulted in a score-obsessed mentality.
  • Rothstein
    Rothstein Posts: 90 Forumite
    crazyfj wrote: »
    As someone that has worked in this area. All companies adjust scores to market needs. A bank will have mutiple algorithms for products. All can be increased or reduced due to market pressures, company profits and product. Existing customers will also have a score. You should use the 3 credit reporting tools to make sure your report is correct. If you have a lower score it does not mean you will never get credit.

    I would never suggest to anyone if they have a lower score they will not get credit. That's simply not the case. While you can use the system as baseline. Lower scored people are certainly not barred from credit. Many companies offer tailored products for these scores and high apr due the increased risk.


    Who did you work for and in what capacity ?
  • crazyfj
    crazyfj Posts: 297 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    Rothstein wrote: »
    Who did you work for and in what capacity ?

    A bank and designed those algorithms you know so much about. However you are either a troll or misinformed, could be both.
  • molerat
    molerat Posts: 34,582 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    OK, I'll bite.

    My Equifax score is 547/700, 78%. The area average is 65% and UK 54%
    My Noddle score is 646/710, 91%. Both the area and UK average is 86%
    My Experian score is 999, 100%

    So if I need to borrow some money I had better go to Experian ........... oh, wait a minute, they don't lend out money do they !

    If the numbers are such an accurate reflection of my, and the rest of the UK's, credit worthiness why is there such a disparity between the different providers ?
  • Rothstein
    Rothstein Posts: 90 Forumite
    Then clearly the same information is not being provided to all 3 agencies !

    Doesn't that intrigue you ?, don't you want to discover WHY they are differing and do something about it ?

    For the last time, I don't work for anyone, I am self unemployed
  • PixelPound
    PixelPound Posts: 3,058 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    Rothstein wrote: »
    Then clearly the same information is not being provided to all 3 agencies !
    Doesn't that intrigue you ?, don't you want to discover WHY they are differing and do something about it ?
    For the last time, I don't work for anyone, I am self unemployed
    Are you an advertising/media campaign type of company hoping to get work out of the CRA's? :rotfl: (Sorry if it sounds provocative but not sure if you have a different opinion to most people on this site because you are simply trolling, or believe it and unwilling to either back up views or take on board counter arguments)

    The same information might be provided to all 3, though probably not, and each company could well add different weights to things when compiling their scores. That's to be expected as if they were the same, then why would we need three?

    Does it intrigue me? What, do you mean to the point of paying monthly subscriptions for credit management services. There are far better options of using nearly £50 to improve my score than paying for subscriptions, for one I could use that £50 a month to pay down my debt which would have a greater improvement on my score than any monitoring service ever could.

    It doesn't bother me what the scores are because they are irrelevant, it's what is on the report that is important not some number. Do you want to know why I say irrelevant? Many people post on here worrying that their score has gone down because they made an application, closed an account, or did something else, or alternatively want to improve their score before they apply for something. They focus on the score and not what is on their report - any creditors will look at what is on their report and not the score, because they can't see it.

    I have the free subscription services and check them but pay little heed to what the value is, or where it is relative to the populous, more on if it has changed then I need to see what has changed on my report.

    What I am intrigued to know though, is why you feel paying subscriptions to each help you monitor your score daily is important and how that is better than reducing your debt by an extra £600 per year?
  • KoshB5
    KoshB5 Posts: 84 Forumite
    Eighth Anniversary 10 Posts Combo Breaker
    edited 6 March 2017 at 2:53PM
    Lenders have their own scoring and decisioning based on their business model, they use your credit history (no more than 6 years) to determine this. The CRA score is a generic and therefore simplistic credit risk score that reflects the things that are considered by a lender but can't predict how a particular lender will assess you.

    Whilst this link http://www.myfico.com/credit-education/whats-in-your-credit-score/ is from the US it will give you a good view of how a credit score is generated. The US is very similar to the UK operating what is termed a positive (account histories always being provide) CRA, countries like Spain operate a negative (data only provided when the account becomes distressed) CRA.

    For more on a CRA and credit this is useful - https://ico.org.uk/for-the-public/credit/ the ICO regulate CRA's from a data perspective. They are also now regulated by the FCA.

    There is no statutory requirement for a provider of data to send data to all 3 CRA's
  • Chappaz
    Chappaz Posts: 138 Forumite
    Fifth Anniversary 100 Posts Combo Breaker
    Rothstein wrote: »
    Doesn't that intrigue you ?, don't you want to discover WHY they are differing and do something about it ?

    Because each agency has their own scoring algorithms and the idea of a universally accurate score is therefore a myth.

    Problem solved.
  • System
    System Posts: 178,348 Community Admin
    10,000 Posts Photogenic Name Dropper
    edited 6 March 2017 at 9:04PM
    Rothstein wrote: »
    The scores are not meaningless, you just don't understand them

    So explain what position I am in when in the same month that Experian whacked my score up from 900 to 999 Clearscore dropped it from 526 to 500?

    Lenders do not use credit scores.
    Rothstein wrote:
    If you make on time payments and your utilisation ratios are low , YOUR SCORE WILL GO UP

    I've never missed a payment, my utilisation has continued to drop month on month.

    In the last year Equifax has gone:
    May 982, Jul 999, Sep 999, Oct 869, Dec 981, Feb 992

    Clearscore:
    May 526,Jun 526, July 526, Aug 500, Sept 500, Oct 508, Nov 508, Dec 508, Jan 508, Feb 500

    So from May to July when Equifax went up Clearscore remained the same. From July to September when Equifax remained the same Clearscore dropped. From Sept to Oct when Equifax tanked Clearscore went up and from then on when Equifax has continued to rise Clearscore has maintained or fallen.

    So given I meet your two criteria why have my scores varied so much? Nothing has changed, there have been no more borrowings, no loans or applications, all things are the same on my reports as the previous months other than balances falling.
    This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com
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