Sudden drop in credit score..

pacpac2018

Hi, I am regurarly monitoring my credit file; about average score on both Experian and Callcredit. I have three credit cards and two current account overdraft facilities, and no adverse notes on the credit file, i.e. no public judgements or any late payments. Last week I had a) one hard search credit card application, b) one new credit card account and c) unsecured loan account, all visible on both credit files. I then noted the credit score fell by 15-20%. I guess the reason would be the recent credit card application and the two new credit accounts posted. Any thoughts on how long time it will take for the score to get up to where it was earlier? Thanks.

[Deleted User]

Don't worry about the scores. They're not used or seen by anyone and have no connection to your credit worthiness. It's just a little gimmick for you to enjoy.

Just manage your accounts properly and all will be well when lenders look at your files.

pacpac2018

Hi, thanks. I guess staying away from any public judgement and fraud issues combined with no late payments notes, generally paying off the card payments in full, keep up with loan installements and have no more than 60-80% credit utilisation at any given time would be OK? Thoughts?

[Deleted User]

That's a fairly high utilisation. I'd be looking at sub 50% to avoid worrying lenders.

Though if all accounts are being cleared in full esch month, it's less of an issue.

pacpac2018

Great, thanks.

latitat

As zx81 rightly says, if you are seen for a fixed duration / 2 payment terms using over 50% it is seen as poor money management. If you could get it down to 40-45% it will automatically reflect positively within the refresh term of the likes of Experian.

Lenders look at many elements such as your employment status, longevity etc than concentrating on actual credit scores so i would not be overly concerned.

One strange negativity that many people do not realise when obtaining a card to improve their credit rating is that if you are offered a low limit e.g., MBNA £1000 then this can negatively affect your credit score for a period of 6 months until you are offered a higher limit.
So in effect penialisation for trying to better the credit score.

pacpac2018

Thanks, good points and guidance. What would be the best way to manage the overdraft facility on the current accounts vis-a-vis using credit available on cards?

[Deleted User]

Try to stay out of your overdrafts. They look bad and can be withdrawn at any time.

pacpac2018

Thanks, great input. Working out the money management policy for 2019...