Credir score gone down

Goldstar28

Hi, I applied for a credit card and have stayed well below my limit and paid off in full as soon as I received my first statement and my credit score has gone down.

I thought having a credit building credit card would increase my credit score not lower it?
Nothing else has changed in terms of finances.

NewToTheUkAgain

Your score is meaningless. Only you see it. However it is an indication of how lenders would view you, and on the short term having a new credit card would lower your “score”.

Willing2Learn

Goldstar28 wrote: »

I applied for a credit card and have stayed well below my limit and paid off in full as soon as I received my first statement and my credit score has gone down.

I thought having a credit building credit card would increase my credit score not lower it?
Nothing else has changed in terms of finances.

Ignore your score as lenders neither use it or see it. All a lender wants to see is successful management of your credit accounts. A lender scores you against the data held in your credit file added to the data you submit in an application.

So , what you need to do, is use your new credit card for all of your monthly budgeted expenses, (such as groceries and petrol), and then pay off the balance in full each month after you receive the statement. The easiest way of doing this is to set up a DD to pay the full balance. If you do this, your meaningless score will gradually improve over time lol

maxximus75

The reason for your "fictitious" score has gone down will be because of a couple of factors....


1: The hard search for applying for the account showing on your credit history



2: The new account now showing on your credit history


This is absolutely normal. In a couple of months this "score" will bounce back and the more good history you have, the better your "score" will be.


But as mentioned.... ignore the score and just concentrate on paying on time, each month.

Terry_Towelling

Most people on here acknowledge that the credit score is generally meaningless and is mostly a marketing tool to sell things to people - how else are the credit score providers going to make any money?

On the back of that is the effect that a movement in score has on your behaviour. Upwards movements make you feel better, downwards movements make you panic. Either way, the 'marketeers' know you will revisit the site to verify upwards progress and thereby subject yourself to more marketing.

I'm not saying the scores are artificially manipulated to achieve a marketing aim but the providers rely on the psychological effect of these movements to sell you stuff to either rectify the terrible score-dropping catastrophe that has befallen you or to build on the fantastic score-improvement that they have so generously bestowed upon you.

If the score providers were being honest with you, they'd probably advise you up-front that taking out a plugged credit product could temporarily drop your score until the lender was able to see that the product was being correctly used - or something like that. I've never used such a site, so I don't know if they are as up-front and honest with you as that.

Chino

OP - FYI, there's a board on this forum specifically created for people like you to discuss your nonsense "credit score":
https://forums.moneysavingexpert.com/forumdisplay.php?f=257

datlex

Credit scores are meaningless, mine has gone up for example. Yet I have bought a property so have a credit commitment much higher than before.

binaryuniverse

datlex wrote: »

Credit scores are meaningless, mine has gone up for example. Yet I have bought a property so have a credit commitment much higher than before.

Having a property is a sign of stability, and you'll be viewed as less of a risk, as less likely to do a runner. So the algorithm will score you favourably there, despite the huge mortgage to pay off.

Mr_Underwriter

Goldstar28 wrote: »

Hi, I applied for a credit card and have stayed well below my limit and paid off in full as soon as I received my first statement and my credit score has gone down.

I thought having a credit building credit card would increase my credit score not lower it?
Nothing else has changed in terms of finances.

It's meant to be indicative of your history, other variables have to be factored in.

[Deleted User]

What? Like copying and pasting replies?