Any tips for applying for CC?

jakeec

Thank you all for the help! I did the Capital One eligibility check and they gave me 100% chance of being accepted, so I'll mull it over.

@dresdendave - I'm using Noddle and ClearScore. I also had Experian, but I cancelled that after the trial period.

PixelPound

jakeec wrote: »

Thank you all for the help! I did the Capital One eligibility check and they gave me 100% chance of being accepted, so I'll mull it over.

@dresdendave - I'm using Noddle and ClearScore. I also had Experian, but I cancelled that after the trial period.

So 100% basically means you will get a card, they may give you a limit of £200 or less, but at least you would have a card.

You may not need a card, so the question is why did you apply, if its just to improve your "score" or because others have told you need a credit history then don't get one. If it's because you are planning to get some big credit in future, like a mortgage, a big purchase loan etc, that you want to show responsible credit use, then maybe get one.

eskbanker

I agree that credit scores are essentially fictitious and unseen by lenders, so in itself there's no point in aspiring to reach an arbitrary number of 999 or whatever.

However, to me, trying to build a credit history should be seen as the means to an end, i.e. the ultimate aim for many would be access to some or all of:

• Prime credit cards with perks such as cashback or rewards
• Decent credit limits that support sizable purchases
• Mortgages with reasonable interest rates
• Balance transfer deals (although obviously having balances in the first place is best avoided)
• Better rates on (for example) car finance or loans (again not without risk)

That doesn't mean that people should necessarily be looking to get more and/or better credit in future, but a well-managed credit file at least keeps that option open....

https://www.moneysavingexpert.com/loans/credit-rating-credit-score/

mrmajika

I see a lot of misinformation on this site from on an increasingly regular basis, with many trotting out the remark "there's no such thing as a credit score", when there absolutely is!

There is no such thing as a UNIVERSAL credit score, as each lender scores individuals a little differently. I, for example, was fully aware of my score with LTSB at the time when I was an employee and had a good understanding on how they calculated this (Where a great deal of emphasis was put on account management, average balances and days in credit each month vs the external information provided by the credit reference agencies).

I agree with others in this thread that suggest focusing on establishing a decent credit history, but then, that in turn would increase your credit score as provided by Experian et al.

I agree there's no need to get hung up on small movements on your score, however, equally, such scores IMHO are good at giving you an idea on how you're viewed by lenders, so endeavouring to keep a reasonably high score with the credit reference agencies can only be a good thing; maintaining a good credit score and a good credit history are not mutually exclusive; they go hand in hand.

Equally, the mantra that there's no point in applying for credit if you don't need it, is also, in my view, false. Building a solid credit history can help you in years to come when you actually NEED credit.

That's my opinion, and OP, i'm sure you'll get others. Just make sure you accept none as gospel (including mine ..... despite my tongue in cheek signature!!)

[Deleted User]

mrmajika wrote: »

I see a lot of misinformation on this site from on an increasingly regular basis, with many trotting out the remark "there's no such thing as a credit score", when there absolutely is!

There is no such thing as a UNIVERSAL credit score, as each lender scores individuals a little differently. I, for example, was fully aware of my score with LTSB at the time when I was an employee and had a good understanding on how they calculated this (Where a great deal of emphasis was put on account management, average balances and days in credit each month vs the external information provided by the credit reference agencies).

I agree with others in this thread that suggest focusing on establishing a decent credit history, but then, that in turn would increase your credit score as provided by Experian et al.

I agree there's no need to get hung up on small movements on your score, however, equally, such scores IMHO are good at giving you an idea on how you're viewed by lenders, so endeavouring to keep a reasonably high score with the credit reference agencies can only be a good thing; maintaining a good credit score and a good credit history are not mutually exclusive; they go hand in hand.

Equally, the mantra that there's no point in applying for credit if you don't need it, is also, in my view, false. Building a solid credit history can help you in years to come when you actually NEED credit.

That's my opinion, and OP, i'm sure you'll get others. Just make sure you accept none as gospel (including mine ..... despite my tongue in cheek signature!!)

The CRA scores aren't even a slight resemblance of how a lender views you.

There are posts littered on this forum from people with "999" scores who were recently made bankrupt, and those with "999" scores getting refused for £20 per month SIM only contracts, and those with "300" scores "somehow" getting mortgages for £300k and upwards.

The CRA's are not lenders so they cannot possibly score or rate you for products and services, given each lender uses there own systems and algorithms and workings out to match someone to a product.

mrmajika

!!! wrote: »

The CRA scores aren't even a slight resemblance of how a lender views you.

And there it is; hence my previous post.

Your assertion that the CRA scores "aren't even a slight resemblance of how a lender views you", iny my experience is false.

Yes, there will be anomalies, but surely these are the exception rather than the rule?

To obtain a high credit score with Experian for example you require:

No CCJs or equivalent court rulings.
No missed payments.
A low to middling credit utilisation.
A history of repayments and account stability.
No missed payments or defaults
No excess of applications (hard searches).
Electoral roll registration, with a home owner scoring higher.
A decent income.

Now, each lender places a different emphasis on each of those points as they see fit, to match their risk policies, but surely, generally, hitting those criteria above (thus having a high CRA score) will mean you're more likely to be accepted with any lender?

Certainly, when I worked with LTSB (albeit 12+ years ago now) there was an external CRA score pulled directly from Experian which graded each customer from A to G, with A being the best. There was then an internal risk band that used this external letter together with internal account conduct, resulting in a risk band between 1 and 9 being attributed to each customer, with 1 being the best.

I suspect most other financial institutions work in a similar fashion, however, I have no other knowledge of their internal workings.

Willing2Learn

But mrmajika, that does not explain how, for example, an undischarged bankrupt posts up that they have a perfect '999 score' from Experian, only to find themselves perplexed when a lender declines their application for credit? Or why I can make a over dozen successful applications for credit during a twelve month period, which according to the CRAs is a big negative, causing my scores to drop to the 'fair' position?

mrmajika

Willing2Learn wrote: »

But mrmajika, that does not explain how, for example, an undischarged bankrupt posts up that they have a perfect '999 score' from Experian, only to find themselves perplexed when a lender declines their application for credit.

That's true. (I've not seen that myself but don't doubt you.) I suspect that's the exception rather than the rule. I'd imagine that most undischarged bankrupts have a very poor CRA score.

Willing2Learn

The reality is that major lenders do not use or see the CRA-derived credit score. They score a borrower, independently, against their own criteria and policies using the data held in the credit files, added to the data submitted in a credit application, added to the data the lender may already hold on the borrower as an existing or returning customer. This means a lender comes up with their own score which determines their decision of whether to lend.

[Deleted User]

mrmajika wrote: »

And there it is; hence my previous post.

Your assertion that the CRA scores "aren't even a slight resemblance of how a lender views you", iny my experience is false.

Yes, there will be anomalies, but surely these are the exception rather than the rule?

To obtain a high credit score with Experian for example you require:

No CCJs or equivalent court rulings.
No missed payments.
A low to middling credit utilisation.
A history of repayments and account stability.
No missed payments or defaults
No excess of applications (hard searches).
Electoral roll registration, with a home owner scoring higher.
A decent income.

Now, each lender places a different emphasis on each of those points as they see fit, to match their risk policies, but surely, generally, hitting those criteria above (thus having a high CRA score) will mean you're more likely to be accepted with any lender?

Certainly, when I worked with LTSB (albeit 12+ years ago now) there was an external CRA score pulled directly from Experian which graded each customer from A to G, with A being the best. There was then an internal risk band that used this external letter together with internal account conduct, resulting in a risk band between 1 and 9 being attributed to each customer, with 1 being the best.

I suspect most other financial institutions work in a similar fashion, however, I have no other knowledge of their internal workings.

To obtain a high credit score, just close your eyes and think of a number.

I did an experiment with all of the CRA's to test this theory - signed up to ClearScore, MSE Credit Club and Credit Karma with different 2 email addresses, but all other information exactly the same (address history, income, outgoings, rent etc etc.)

Lo and behold from each CRA, the scores were different for each email (and in once case, vastly different by a couple of hundred "points").

I closed/cancelled the accounts and did the same again a week later, and again, all different scores across the board, especially when compared to the previous week where no searches or applications were made in that time.

So, it still stands that the CRA scores bear no resemblance on what a lender may or may not "score" you with their own internal (and private) systems.

That and confirmation from people who work in the industry.