Conflicting Credit Scores

Tatters26

Morning, I'm going forward for a mortgage next year so started checking out credit files/scores.

As of this month (so it won't show up yet) I have a zero debt at all, but previously had a couple of defaults and missed payments that I cleared literally two weeks ago.

Anyway on Credit Karma (previously Noddle) I'm showing up as 511 which "needs work" and isn't good at all, yet my Experian is "Good" at 920.

How can I have such conflicting scores/ grades?

Any advice would be good on which is likely to be

a) more accurate in general
b) looked at by a mortgage lender

[Deleted User]

Neither is accurate and neither will be looked at by a lender.

They're just provided for your entertainment only and not a reflection of your credit worthiness.

Review the data on your three credit files to understand if there are any issues that may cause you problems.

Tatters26

So you're saying there is no point to these scores at all? So when I apply for a credit card and get declined/ accepted inside 30 seconds of hit "apply" - what do they look at?

[Deleted User]

They look at the data on your file - your accounts, defaults, debts, ER, financial associations and so on.

There scores are purely for entertainment purposes, like horoscopes and Magic 8 balls, only slightly less meaningful.

[Deleted User]

I guess you didn't read the sticky before posting?

https://forums.moneysavingexpert.com/discussion/4974939/what-your-credit-score-really-means

Tatters26

I went for a mortgage about 2 years ago (was to be guarantor'd by my then mother-in-law) and even the mortgage broken/ adviser then mentioned credit scores, so to find out they don't exist is odd.

[Deleted User]

They were probably talking to you about credit scoring - ie the process that the lender goes through to assess your application.

Either that or they were being lazy in their terminology, or genuinely didn't know what they are talking about, which is more likely to be the case with with estate agent brokers, rather than real brokers.

jimbo26

The term credit score seems to be creeping into UK terminology. As others have said the 'score' is a number that a CRA attributes to you based on information they hold on you. Their score is of no importance whatsoever when you apply for credit.

A lender will look at the information in your credit report and run their own algorithms to decide whether to extend you credit or not.

The reason different CRAs have different scores is because each will hold different information about you, and each will create a score using different factors, and adding different importance to each factor in your file.

Some people get very excited about their score and like to tell everyone they have a 999 Experian score, and get ever so upset when it drops a few points, often sending CRAs letters, and generally getting hot under the collar about it.

In a nutshell you can ignore the score, it will have zero impact on you getting a mortgage.

JennyJukes

Is the information on both of them the same?
My score is better with clearscore than creditkarma but they don't have my biggest loan on clearscore for some reason!

jimbo26

JennyJukes wrote: »

Is the information on both of them the same?
My score is better with clearscore than creditkarma but they don't have my biggest loan on clearscore for some reason!

The information may not be the same on all 3 CRAs because some lenders don't report to all CRAs. So you may see some credit accounts on 1 CRA but not the others.

Ebe_Scrooge

Tatters26 wrote: »

Anyway on Credit Karma (previously Noddle) I'm showing up as 511 which "needs work" and isn't good at all, yet my Experian is "Good" at 920.

Proof, if any were needed, that the scores issued by the CRAs are as useful as a sack of wet mice. A potential lender cannot see these scores, even if they wanted to. What they will look at is the historical data contained in your file - for this reason, it's important to ensure that the data is factually correct (address, current credit usage, payment history, defaults, CCJs, etc.) As a previous poster said, not all lenders use or report to all 3 agencies, but any data that is on your history should be accurate.

What can be a source of misunderstanding is that a lender will take your information, crunch it through their systems and come up with an internal "credit score". This score is particular to each lender, and will depend on many factors such as their appetite for risk and their preferred client demographic. The factors that feed into this internal score are confidential and commercially sensitive, so no-one will know what factors or weighting they use.

But the bottom line is - you can completely ignore the score issued by the CRAs. At least, until such time as they start to lend money to people :-)