Paid all of my debts and my credit rating dropped 100 points..why???

ClaireC1

Hi all,

I have spend the last 4 years paying all of my debts off (credit cards/overdraft/store cards), around £12,000. I made the final payments on 2 accounts last month and the accounts were closed, my credit score dropped 100 points in 2 months. It wasn't the best to start with, it was in the low good range before and but now I have no debt other than my mortgage but it is now poor.

How is it possible that I am worse off now than I was with all of the debt? I dont understand. Im so disappointed!

[Deleted User]

You're not worse off.

Your score is fictitious and made up.

The only thing that matters is the data and history on your file.

Carrot007

Though to think about it. Because you now have no credit so look like someone that does not use credit or pays it off quickly so won't make a company money.

But since whereever you go the score from won't lend you anything it's not their view that counts.

[Deleted User]

I have loads of spare points.

I'll send you some.

Thrugelmir

You closed your accounts. Anybody viewing your record won't know why. Will soon recover.

tykesi

These CRAs really have got people hook line and sinker haven't they? The number of threads on here from people who have clearly believed the hype is staggering and this is just a small portion of the population.

I often think it gets boring reading the "ignore your score" mantra which comes out on all these threads but it absolutely needs saying until it starts sinking in.

ClaireC1

Thanks all for the responses.

I am not so much hung up on the number score more the impact of it dropping. I am looking at getting a buy to let mortgage (hence clearing the debt) and had done some soft searches about a year ago with a good rating which were all approved, I have done them now having cleared all the debt and they are declined.

[Deleted User]

ClaireC1 wrote: »

Thanks all for the responses.

I am not so much hung up on the number score more the impact of it dropping. I am looking at getting a buy to let mortgage (hence clearing the debt) and had done some soft searches about a year ago with a good rating which were all approved, I have done them now having cleared all the debt and they are declined.

As above - there is no impact on it dropping.

No one sees it but you are the CRA's - lenders do not, and will have their own internal scoring systems based on the data on your files.

[Deleted User]

It's really nothing to worry about. Credit scores are largely fictional and react negatively to change. You've paid off debt, so the score drops.

Lenders, on the other hand, will see you as lower risk.

To maintain a credit history, consider getting a card and using it regularly and clearing in full each month.

Check all three of your files to check the information is correct on them all.

And never ever take notice of a CRA score, from any of them.

MEM62

ClaireC1 wrote: »

Thanks all for the responses.

I am not so much hung up on the number score more the impact of it dropping. I am looking at getting a buy to let mortgage (hence clearing the debt) and had done some soft searches about a year ago with a good rating which were all approved, I have done them now having cleared all the debt and they are declined.

Paying off your debts will not have caused the declines.

[Deleted User]

They would have been declined as the debts are still showing on your files.

And will do for 6 years