Drop in score after opening current account???

Chessman

Hello
My wife has been slowly rebuilding her credit score after a messy divorce 7 years ago where the home was repossessed.
She has a ClearScore account and has been taking things bit by bit, doing whatever it suggested in order to make positive steps forward. She now has a couple of credit cards which she is responsible with and clears the balance monthly.
Her score has steadily climbed and recently got upto 389 which is a far cry from where she started.
Due to the prior house repossession she only ever had been allowed a Delta card and had not been able to have a 'proper' current account with her bank. That was until recently, when due to her progress with her credit score was able to open a fresh full current account with her bank (Halifax). She has switched all her DDs etc over and all has been good. Until today.
This morning she had a notification from ClearScore that her credit score had dropped. On investigation her score has plummeted from 389 to 262! The reason stated is that she opened a Current Account!!??
Surely this cannot be correct...
She has not defaulted on any payments etc and she is naturally worried as it is a big drop when she was doing so well.

Any suggestions on why this is the case and is there any way to contend it??

Thanks in advance, D

DCFC79

Chessman wrote: »

Hello
My wife has been slowly rebuilding her credit score after a messy divorce 7 years ago where the home was repossessed.
She has a ClearScore account and has been taking things bit by bit, doing whatever it suggested in order to make positive steps forward. She now has a couple of credit cards which she is responsible with and clears the balance monthly.
Her score has steadily climbed and recently got upto 389 which is a far cry from where she started.
Due to the prior house repossession she only ever had been allowed a Delta card and had not been able to have a 'proper' current account with her bank. That was until recently, when due to her progress with her credit score was able to open a fresh full current account with her bank (Halifax). She has switched all her DDs etc over and all has been good. Until today.
This morning she had a notification from ClearScore that her credit score had dropped. On investigation her score has plummeted from 389 to 262! The reason stated is that she opened a Current Account!!??
Surely this cannot be correct...
She has not defaulted on any payments etc and she is naturally worried as it is a big drop when she was doing so well.

Any suggestions on why this is the case and is there any way to contend it??

Thanks in advance, D

So the score has dropped, its just a figure.

Tell your wife to not be naturally worried about the score dropping.

In any case there are 2 other agencies lenders, banks use to get information and the score/rating from them may have dropped more but no need to worry about it.

What matters is the information is factual as lenders see this and not the score (just your wife can see this).

[Deleted User]

Chessman wrote: »

Surely this cannot be correct...

It surely can.

Random numbers change randomly. It is due to their random nature.

MEM62

Chessman wrote: »

Hello
My wife has been slowly rebuilding her credit score after a messy divorce 7 years ago where the home was repossessed. Sorry she had to go through that. It's always tough.
She has a ClearScore account and has been taking things bit by bit, doing whatever it suggested in order to make positive steps forward. I hope that she is not paying for this service. She now has a couple of credit cards which she is responsible with and clears the balance monthly. That's always a positive thing.
Her score has steadily climbed and recently got upto 389 which is a far cry from where she started. If that makes her feel good then fine but you do realise that it is utterly meaningless don't you?
Due to the prior house repossession she only ever had been allowed a Delta card and had not been able to have a 'proper' current account with her bank. That was until recently, when due to her progress with her credit score was able to open a fresh full current account with her bank (Halifax). She has switched all her DDs etc over and all has been good. Until today. She did not achieve that due to any change in the randomly generated number that is sold to you as her 'score'. She achieved that because she is improving her credit history, which is what really counts. And well done to her for that.
This morning she had a notification from ClearScore that her credit score had dropped. On investigation her score has plummeted from 389 to 262! So what? The reason stated is that she opened a Current Account!!?? It is just as likely to be because your wife wore different socks.
Surely this cannot be correct...
She has not defaulted on any payments etc and she is naturally worried as it is a big drop when she was doing so well. She is still doing well. There is no point in worrying over a randomly generated number which (a) you have no control over and (b) is only even seen by you. It has no relevance to your wife's financial standing.

Any suggestions on why this is the case and is there any way to contend it?? Nope! You cannot challenge a randomly generated number.

Thanks in advance, D

..........................

cjmillsnun

@MEM62 Clearscore is free. It's the freebie for Equifax.

forgotmyname

My "SCORE" dropped because i paid my CC bill on time.. Thats how useful the scoring system is.

Scores are meaningless until the companies giving the scores start lending.

Ebe_Scrooge

forgotmyname wrote: »

Scores are meaningless until the companies giving the scores start lending.

Couldn't agree more.

To the OP - to reiterate, your score is meaningless. It's merely a tool the CRAs use in an attempt to sell you unnecessary services. Your score cannot be seen by any prospective lender, they can only see the facts relating to your credit history. And in fact, the score provided by the CRAs usually drops whenever your credit status changes at all, for better or for worse. There was a thread on here a few days ago about someone who had sold their house, paid off their mortgage - and their score dropped. A change in credit circumstances - despite the fact they now owed substantially less overall.

You say "She now has a couple of credit cards which she is responsible with and clears the balance monthly. " This is one of the easiest ways to begin to rebuild your / her credit history. Sensible use of credit cards, always paying in full and on time, without fail. Give it a year or so, then you'll be able to apply for more "mainstream" cards if you wish.

Oh, and watch the "score" plummet again when the application for another card is accepted. Another change in credit circumstances :rotfl:

MEM62

cjmillsnun wrote: »

@MEM62 Clearscore is free. It's the freebie for Equifax.

So it is. Silly me!

sfax

Repeatedly telling people credit scores are random is misleading. They aren't seen by lenders, true, they have very limited value and are often misleading, true, but they are produced by an algorithm that looks at basic changes in circumstances, e.g., move house, new credit account, so in that respect, they aren't random at all in a mathematical sense, just too basic and arbitrary and of limited use.

And they're also no longer something that is necessarily sold. E.g., Experian credit score is now free with Barclaycard.

You shouldn't preach that everyone''s score is random as it could be a red flag and if someone hasn't noticed a new fraudulent account appearing or doesn't realise that moving house can adversely affect their credit rating, their "random" score may act as a first warning. Telling people it's random may result in them ignoring an underlying problem.

And before people reply with examples of inaccurate scores, yes, they are just some examples but more often than not a big drop in score is a red flag because it's an algorithm, not random.

I use my (free) Experian score to complement my credit report alerts because I don't have time to examine my three full credit reports every month. I would never rely on it but it's just one tool of many and you simply need to understand its limitations

RG2015

Well said!

As a red flag warning, I check all three reports free of charge. MSE Experian, Clearscore Equifax and Callcredit on both Noddle and GiffGaff. The good thing about GiffGaff is that it updates every day and only requires membership of the GiffGaff community.

MEM62

sfax wrote: »

Repeatedly telling people credit scores are random is misleading. They aren't seen by lenders, true, they have very limited value and are often misleading, true, but they are produced by an algorithm that looks at basic changes in circumstances, e.g., move house, new credit account, so in that respect, they aren't random at all in a mathematical sense, just too basic and arbitrary and of limited use.

And they're also no longer something that is necessarily sold. E.g., Experian credit score is now free with Barclaycard.

You shouldn't preach that everyone''s score is random as it could be a red flag and if someone hasn't noticed a new fraudulent account appearing or doesn't realise that moving house can adversely affect their credit rating, their "random" score may act as a first warning. Telling people it's random may result in them ignoring an underlying problem.

And before people reply with examples of inaccurate scores, yes, they are just some examples but more often than not a big drop in score is a red flag because it's an algorithm, not random.

I use my (free) Experian score to complement my credit report alerts because I don't have time to examine my three full credit reports every month. I would never rely on it but it's just one tool of many and you simply need to understand its limitations

The free services are indeed very worthwhile and there is no suggestion that these are not very useful tools - they are! The problem comes from misleading advertising that suggests to people that they need to subscribe to a CRA's service in order to improve their score and therefore their credit standing / credit worthiness. This is complete tosh and the number of people that fall for it is evidenced by posts on this forum. And I have an issue with the 'score' as it is the marketing tool by which people are mislead.

With respect to it being a 'red flag' I cannot see how you get to that conclusion. If you log onto a free CRA service then you have access to the data on your report and, as we all know, it is the data that is important. I am not sure how the score alerts you to this. It's not as if you would log on, check your score and then only check the data if you had an issue with the score. It doesn't work like that. You just log-on and check the data.

On the subject of how the data is calculated, not even the operators can tell you how this works. (And as they are not lenders there is no need for any confidentiality around this) I dare say that the CRA's would argue that the number is not randomly generated but as we regularly see bankrupt individuals with good scores and those with a good credit history given bad scores then, if there is a method to it, it is fundamentally flawed. In my opinion, you cannot lend any weight to it's credibility.