99 point dive in credit score and no idea why

in Credit Cards
20 replies 1.2K views
ConnarConnar Forumite
25 Posts
Seventh Anniversary Combo Breaker
Hi,

I got an updated Experian credit report today which shocked me in a big way. After being at the same score for 3 months (since I started the account) I applied for a credit building card and have been using it for 2 months. I went 7p over my 50% limit I set myself this month (accidentally) and I know that apparently spending over certain thresholds can been seen as negative with some lenders. My card is only a £400 limit and in the 2 months I've had it I've paid off the balance within 2 days of it being available to be paid.

What I don't understand is what could have caused such a dramatic dive in my score. last week I sent a large amount of money £10k+ to my solicitor for payment on a house me and my wife are buying. Could that have anything to do with it? Is that seen as something that could damage my score? If so I'm astonished, that spending towards a house could cause me basically 100 points in negative credit score.

I haven't applied for any more cards or any increases in limits, or even for finance with any companies and been rejected so I'm at a loss as to why I've been punished.

I was planning on eventually applying for a few more credit building cards to help increase my score even further, but I doubt I'll be able to as this has driven me into the poor tier.

Any help would be greatly appreciated.
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Replies

  • madvickermadvicker Forumite
    156 Posts
    First Anniversary
    Ignore the score. Lenders don't look at it. Only you can see it. What matters is your credit history - and the most important thing to remember here is not to have adverse credit in your history. So no:

    - Late payments
    - Arrears
    - Defaults
    - CCJs
    - Exceeding your credit limit
    - Unauthorised overdraft usage
    - Fraudulent information (an obvious one, but people still do it...)

    Aside from that, what you've said in your post is fine - don't worry. Especially about the deposit on your house - that is not a line of credit and has absolutely ZERO impact on your credit history.
  • Willing2LearnWilling2Learn Forumite
    6.3K Posts
    Seventh Anniversary 1,000 Posts Name Dropper Photogenic
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    In addition to what madvicker said.

    Lenders don't use the score. They use the data held in your credit report and any data you provide during an application. All this data is used by the lender to score you against their criteria and policies.
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    :smiley:
  • ConnarConnar Forumite
    25 Posts
    Seventh Anniversary Combo Breaker
    madvicker wrote: »
    Ignore the score. Lenders don't look at it. Only you can see it. What matters is your credit history - and the most important thing to remember here is not to have adverse credit in your history. So no:

    - Late payments
    - Arrears
    - Defaults
    - CCJs
    - Exceeding your credit limit
    - Unauthorised overdraft usage
    - Fraudulent information (an obvious one, but people still do it...)

    Aside from that, what you've said in your post is fine - don't worry. Especially about the deposit on your house - that is not a line of credit and has absolutely ZERO impact on your credit history.

    First off, thank you for the very quick replies. I understand that they don't use the score, but what I fail to understand is if the score has been affected in such a big way and I have no idea what's done it, doesn't this mean something has happened on my account that would show to a new lender and cause me difficulties down the line. Sure the score isn't what they go off but something is caused it to dive like this.
  • Willing2LearnWilling2Learn Forumite
    6.3K Posts
    Seventh Anniversary 1,000 Posts Name Dropper Photogenic
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    The score went down probably because you have just opened a new credit account only two months ago...but don't worry about the score...worry about the credit report. Just make sure everything is always accurate.
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    :smiley:
  • madvickermadvicker Forumite
    156 Posts
    First Anniversary
    It went down because it rained today. It will go up tomorrow if it's sunny....

    Joking aside: It's likely down to your low limit and as a result, high credit utilisation. I really wouldn't concern yourself by it. Credit builder cards increase their limits quite quickly up to about 2-3K if you continue using the card and staying within your limit. By that point, your utilisation will be much lower and so the score will not be impacted as much.

    But to re-iterate - your score means the square root of !!!!!! all. Just remember to keep checking your report. Only worry if you see things on there that shouldn't be on there. Otherwise, your score can go up and down and cause you a whole load of worry for no actual impact on your life or credit worthiness.
  • ConnarConnar Forumite
    25 Posts
    Seventh Anniversary Combo Breaker
    I should also point out none of the points in your list apply to my current situation. If I had been arrears (for example) without knowing it would have been affecting my score for the 3 months I'd been checking my score wouldn't it? I would have at least seen some indication that something was considered negative on my credit file.
  • oldagetravelleroldagetraveller Forumite
    3.7K Posts
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    My irrelevant "score" goes up and down monthly for no apparent reason. I like any potential lenders, just take no notice. I've never been refused credit of any sort at any time.
  • madvickermadvicker Forumite
    156 Posts
    First Anniversary
    Connar wrote: »
    I should also point out none of the points in your list apply to my current situation. If I had been arrears (for example) without knowing it would have been affecting my score for the 3 months I'd been checking my score wouldn't it? I would have at least seen some indication that something was considered negative on my credit file.

    If none of those points apply, then even more reason to ignore the score and not to worry.
  • ConnarConnar Forumite
    25 Posts
    Seventh Anniversary Combo Breaker
    madvicker wrote: »
    It went down because it rained today. It will go up tomorrow if it's sunny....

    Joking aside: It's likely down to your low limit and as a result, high credit utilisation. I really wouldn't concern yourself by it. Credit builder cards increase their limits quite quickly up to about 2-3K if you continue using the card and staying within your limit. By that point, your utilisation will be much lower and so the score will not be impacted as much.

    But to re-iterate - your score means the square root of !!!!!! all. Just remember to keep checking your report. Only worry if you see things on there that shouldn't be on there. Otherwise, your score can go up and down and cause you a whole load of worry for no actual impact on your life or credit worthiness.

    Will I have to apply for these increases myself or will they ever be offered to me by the lender? If it's for me to do, what time frame should I look at, 6 months, 12, 18? (I have a feeling the answer may be how long is a piece of string?)

    Also, should I be using less than 50%? Is 30% a better amount, as I'm not using the card out of necessity but solely to build credit history.
  • ConnarConnar Forumite
    25 Posts
    Seventh Anniversary Combo Breaker
    Just looking on a site that gives me a "credit report" it says that "what may be holding me back" are CCJs or bankruptcies and accounts in arrears.

    I have no knowledge of what these could be and am a little panicked as to how I would find out what they were so I could sort them, especially the CCJ bankruptcies part :/
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