Help! One hard credit search has dented me 46 points

Bunsenbunsen

Hi all,

Really hoping someone can help me out with this.

Last week I had a credit score of 392 with one search from my bank dated 11 May 2016 (interestingly I cannot recall the nature of this search) - under the search episode it is counted as 2 searches.

Earlier this week I applied for a Barclaycard for travel purposes. My updated report today informed me today that my score has dropped 46 points as a result (again, only one search "episode" but says it's 2 searches).

I was really not expecting such a huge decrease - this has had a really significant effect on my report - I am planning on applying for a mortgage and was under the impression that it would only have a minimal impact doing another search.

Given that the first and only other search (dated May 11) is due to expire soon, would this have a significant positive improvement ?

I am really confused as to why this has had such an effect - there are no other issues with my credit or accounts

Would really appreciate any input

Thanks

[Deleted User]

Don't worry.

The scores are fictional and can be ignored. One search is nothing to worry about.

StopIt

A mortgage broker will not give a hoot about your credit score.


They will look at affordability and your credit history. Factors like LTV, any indebtedness, defaults, AP markers and CCJs will be the factors that are key, not how a CRA scores you.

DCFC79

Now you have broached the subject your score has dropped by 100 to 292.

mrmagooooooo

My score is 3589562* amazing aye!

*I made that up just like the CRA's do ;-)

micky2phones

mrmagooooooo wrote: »

My score is 3589562* amazing aye!

*I made that up just like the CRA's do ;-)

:rotfl: :rotfl:

robber2

"Last week I had a credit score of 392".

NO YOU DIDNT

phillw

Bunsenbunsen wrote: »

I was really not expecting such a huge decrease - this has had a really significant effect on my report - I am planning on applying for a mortgage and was under the impression that it would only have a minimal impact doing another search.

I'd say that 46 points is a minimal impact. The mandatory affordability checks are way more strict than they used to be. You ought to think more about those.

https://www.moneyadviceservice.org.uk/en/tools/house-buying/mortgage-affordability-calculator

Different lenders will look more or less favourably on certain activity on your credit file, but it's not worth worrying too much about.

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/11820068/15-ways-to-endear-yourself-to-a-mortgage-lender.html

Bunsenbunsen

When mortgage lenders conduct an assessment for eligibility/approval do they see or take into account a credit rating? If they do, then the drop in score does seem relevant?

It seems significant in that it has lowered it from a very high "Fair" to a "Poor" rating at a crucial time in my financial timeline (obviously, in hindsight a bad time to apply for credit but this seems a much larger impact than was expected).

Additionally, could anyone shed some light on to why 2 separate searches have been carried out for one application? Does this dent it further.


If the score/rating has no application in reality, what's the point of it?

[Deleted User]

No lender sees your credit rating and wouldn't take it into account if they could.

They only use the data.

The point of the score is to generate interest in the CRAs and sell additional alerts and services.

Chappaz

Bunsenbunsen wrote: »

If the score/rating has no application in reality, what's the point of it?

It's meant to give you a very rough guide.

However, the credit reference agencies use their own scoring models, as do pretty much every other lender. They're all different.

As a result, even this guide score is often useless when it comes to real-world applications.

Plus, as mentioned above, it's also designed as a marketing gimmick to encourage more interest in credit reports. While CRAs now focus more on affiliate marketing to generate revenue by referring customers to financial products, they previously focused on selling report access and subscriptions.

And to make those services more appealing, they included scores to give people something to take an interest in. Without those, regular credit file reviews would be a bit boring as they would just be updated with actions (successful payments/missed payments etc) that you already know are going to happen.

But by having these scores, it makes it interesting. It peaks curiosity so everyone thinks "how will this update impact my score?".

Now hard searches do reduce credit ratings, so after this application, you can expect to be slightly less appealing to lenders as a whole. However, this is extremely marginal. Many lenders simply won't care at all.

It only becomes a big issue if you make many applications within a short space of time.

So no, it hasn't had a significant impact on your credit report, and no, it's not likely to make any noticeable difference. Just avoid making another application for at least a few months if you want to be squeaky clean about it all.