Improved Status, Worse Score

mdrodgers75

Hi

I have been building my credit score up from a really low point over the last two years. A CCJ has been removed and my credit card utilisation is now 5%. I have not had a serious missed payment for 2 years. I got my score to a Good rating from Very Poor.

I recently had my bank offer me an £50 overdraft to avoid any fees on an account I pay bills from, and I got an EE mobile WiFi device that needed a credit check as it wasn't PAYG which I cancelled a month later.

My score has gone worse than ever in those few months even with 2 years of positive behaviour, removal of CCJ and lots of poor history removed. I have no reds or ambers on my file (all green) but now have 3 credit searches. I felt the size of the drop wasn't right.

When I spoke with Equifax they said that although my score has dropped, my credit history has improved. They said the reason for the score drop is 'because I've moved into a higher group of comparative people' as my credit behaviour is now Good and not Poor. Based against this new group my score is lower.

Is this right? I thought decisions for credit were score based, not what 'historical credit behaviour group' you are in.

Is there such a thing? I am wanting to get a mortgage extension soon and now I fear I am less likely to be accepted. I've logged a complaint to have them review my score (if that's possible).

M

[Deleted User]

No decisions are based on your score. It's s work of fiction that can be safely ignored.

Lenders will only ever use the data on your files.

You may want to withdraw your complaint for them to review your score. I think even Experian will have a chuckle at that.

bazzyb

mdrodgers75 wrote: »

I thought decisions for credit were score based, not what 'historical credit behaviour group' you are in

You thought wrong. A credit score gives an indication of your credit history as the CRA sees it, but CRAs don't lend any money. Lenders will look at your credit history rather than score and will also take a lot of other factors into consideration such as income and affordability.

DCFC79

Who have you logged a complaint with ?

Be a waste of time with that as for the reasons explained.

Focus on the history, as long as that is fine and your addresses amd past ones are ok then your ok.

Unfortunately theres no universal score, theres 2 other agencies so get a copy of your reports from them and check they are correct, can be done forfree too.

Ben8282

Getting a £50 overdraft facility should improve your credit worthiness as it shows that your bank are willing to extend an overdraft facility, although a £50 overdraft facility is pretty low which could raise questions in potential lenders minds as to why it is so low.
Concerning EE and the device which was on a contract and required a credit check, I hope that this was not a 24 month contract if you cancelled it the following month! If it was be prepared for late payment markers or a default. This decision to cancel after one month will have an effect on your overall account age for the next 6 years as your credit files will show a settled account age 1 month for the next 6 years.
A single hard search should not have had an effect. If there was a second hard search for the overdraft that may have resulted in a slight lowering of the score.
Your complaint is meaningless as your score is meaningless.

mdrodgers75

Thank you everyone. Very useful. The 'complaint' was probably not the best description, as it was more an enquiry they are raising to look at why the score has dropped when history is better. Normally they say the two factors reflect one another.

I can't see an answer to my point about a score dropping when you move into a higher group (effectively they say that when you have a better credit history, you go into a group that are similar to you. By moving up a group your score drops because you are compared against better credit histories).

Has anyone heard of that?

Thanks again.

M

Sncjw

As other people have said just ignore the score. You don't need to be hung up by a score.

Just check your 3 files for any errors.

Richey_

Lots of people answered your question.

The simple answer is IGNORE THE SCORE! It's a marketing ploy to get you to sign up for their credit "improvement" services at a monthly fee. Nobody other that you and them see this score. Any future lender will only see the history and then make their own decision from there. With Credit history all you can do is let time heal and make sure that everything is accurate.

You need to be regularly checking Experian, Equifax and Call Credit. This can be done for free, use Clearscore for Equifax, MSE credit club for Experian and Noddle for Call Credit.

Re the mortgage you can either scruitanise a lenders lending policies and see if you would fit their criteria or you can engage a broker, possible one that specialises innadverse credit.

[Deleted User]

mdrodgers75 wrote: »

I can't see an answer to my point about a score dropping when you move into a higher group (effectively they say that when you have a better credit history, you go into a group that are similar to you. By moving up a group your score drops because you are compared against better credit histories).

Your question is akin to asking would unicorns be more purple if leprechauns rode bicycles.

vacheron

I have noticed that those companies who offer a free credit score will often mysteriously drop your score after a few months for no apparent reason.

This will usually coincide with an introduction into their paid for services which will provide you with "more detail" regarding how your score is calculated and how to improve it.

After all, who is going to pay a subscription to improve a credit score that is trending positively?

As the score is made up by them anyway they can use any justification they like (as it sounds like they may have done to the OP). As others have said, just ignore them.

As I posted on a different thread I tested this recently and received 2 different credit scores from the same credit score company at exactly the same time.

FutureDreams

My "score" dropped by nearly 100. Reason for this is changes according to credit report. What are these changes? The opening of two savings accounts.