The credit scores your lender can see

bellaboosmapu

While the sentiment is in the right place, I thought I'd try to straighten out some facts with credit scores (and hopefully not cause too much confusion!)

Yes, lenders can see scores produced by credit reference agencies. All three provide generic credit scores - Experian name their scores Delphi, Call Credit have Gauge, and Equifax have Risk Navigator.

I cannot confirm whether these are the same as those on the consumer reports you and I can see, but I would highly expect that the methodology that creates them are similar.

These scores are good at assessing your risk. They are the single best piece of information received by the lender that rates your credit risk. However, they are generic - i.e. designed to assess everyone - and can be improved to better reflect the type of applicant a lender may get. Therefore lenders usually combine the score with other pieces of data from your application or credit file to produce a new score against which they will assess you. Lenders may prefer to ignore the bureau score too - not because it's useless, but because lenders don't know how the score is produced.

At the end of the day though, all scores are based on facts about you, available in your credit file. If your credit file looks good (no missed payments, no CCJs, on the electoral roll etc) you should have a good score. Negative indicators, even if they are in the past (but within 6 years) should bring a score down. That being said, if people are getting excellent scores despite having very negative attributes, suggests that something may not be working entirely correctly there... however, to really answer that would require knowing what contributes to the score.

TL;DR - You do have credit scores, they aren't useless, but don't get too obsessed with them.

DCFC79

bellaboosmapu wrote: »

While the sentiment is in the right place, I thought I'd try to straighten out some facts with credit scores (and hopefully not cause too much confusion!)

Yes, lenders can see scores produced by credit reference agencies. All three provide generic credit scores - Experian name their scores Delphi, Call Credit have Gauge, and Equifax have Risk Navigator.

I cannot confirm whether these are the same as those on the consumer reports you and I can see, but I would highly expect that the methodology that creates them are similar.

These scores are good at assessing your risk. They are the single best piece of information received by the lender that rates your credit risk. However, they are generic - i.e. designed to assess everyone - and can be improved to better reflect the type of applicant a lender may get. Therefore lenders usually combine the score with other pieces of data from your application or credit file to produce a new score against which they will assess you. Lenders may prefer to ignore the bureau score too - not because it's useless, but because lenders don't know how the score is produced.

At the end of the day though, all scores are based on facts about you, available in your credit file. If your credit file looks good (no missed payments, no CCJs, on the electoral roll etc) you should have a good score. Negative indicators, even if they are in the past (but within 6 years) should bring a score down. That being said, if people are getting excellent scores despite having very negative attributes, suggests that something may not be working entirely correctly there... however, to really answer that would require knowing what contributes to the score.

TL;DR - You do have credit scores, they aren't useless, but don't get too obsessed with them.

Lol this might be interesting so Ill get the popcorn and drinks ready.

[Deleted User]

bellaboosmapu wrote: »

I cannot confirm whether these are the same as those on the consumer reports you and I can see, but I would highly expect that the methodology that creates them are similar.

I can confirm that they are not.

The difference between the two is often startling.

MABLE

Deleted_User wrote: »

I can confirm that they are not.

The difference between the two is often startling.

I know from fact the difference is startling. About 10 years ago I wanted an increase on my BC and was refused because the advisor told me BC's internal score was a lot different from the generic score they receive from the CRA..

I had done a lot of searches in a short period of time.

bellaboosmapu

MABLE wrote: »

I know from fact the difference is startling. About 10 years ago I wanted an increase on my BC and was refused because the advisor told me BC's internal score was a lot different from the generic score they receive from the CRA.

Yes, internal decision scores will be a lot different to the bureau score for multiple reasons, including the simple fact that they are probably on different scales. I think zx81 is confirming that the scores that the CRA send to lenders is different to the one they show consumers?

[Deleted User]

Yes. They're entirely different.

The CRA score are one size fits all, crude scores that use a lot of blunt measures. Hence their high levels of inaccuracy and uselessness as an indicator of credit worthiness.

Lender scores are lender and product specific, based on their own risk criteria.

nic_c

bellaboosmapu wrote: »

Yes, internal decision scores will be a lot different to the bureau score for multiple reasons, including the simple fact that they are probably on different scales. I think zx81 is confirming that the scores that the CRA send to lenders is different to the one they show consumers?

They get access to the file data, so showing recent status history of any missed payments or whether defaulted etc. They have their own internal scoring mechanisms - why would they rely on a company that does not lend money to simply give a score as to whether to lend or not. An audit trail needs to be followed to justify decisions, even if most of the time it's an internal program saying yes/no, so you are not going to simply rely on one random number from experian!

RG2015

Deleted_User wrote: »

I can confirm that they are not.

The difference between the two is often startling.

Are you able to tell us how you know this?

Also, does this mean that you have two credit scores for each CRA, one they give you and one they give the lender?

RG2015

Hi bellaboosmapa,

Can you tell us how you know the information on your initial posts?

[Deleted User]

RG2015 wrote: »

Are you able to tell us how you know this?

Also, does this mean that you have two credit scores for each CRA, one they give you and one they give the lender?

I've worked in credit and lending for many years.

You have the CRA score, but then as many alternative scores as they are lenders who request one, as each is lender specific.

Most larger lenders don't buy scores but generate their own. Even the ones you buy can be error prone.

bellaboosmapu

RG2015 wrote: »

Can you tell us how you know the information on your initial posts?

10+ years building scorecards for lenders.

nic_c wrote: »

They have their own internal scoring mechanisms - why would they rely on a company that does not lend money to simply give a score as to whether to lend or not. An audit trail needs to be followed to justify decisions, even if most of the time it's an internal program saying yes/no, so you are not going to simply rely on one random number from experian!

Yes, CRAs are not lenders, but they can make fairly reasonable assumptions when building a scorecard (the statistical mechanism that produces the credit score) that reflect what a lender might deem as high risk (e.g. someone defaulting on a loan).

RG2015 wrote: »

Also, does this mean that you have two credit scores for each CRA, one they give you and one they give the lender?

To make matters more confusing, there can be several from the same CRA. Over time, CRAs will rebuild scorecards, to make use of new data sources or to accommodate changes in credit behaviour. To allow lenders to audit past decisions the CRA will continue to provide older scores. This might mean that, although two lenders are both receiving a generic bureau score from the same lender, they can be different if they are of different "vintages".