Credit Score big hit recovery time

camelise

Hi MSE community,
My credit score recently took a big hit, causing me a large deal of distress.
Clearscore (Equifax): 464 in July, 333 today (-131).
Experian: 950 in July, 864 today (-86 points).

Over the past few years I've built my credit file by using a credit card regularly, keeping utilisation below 25%, and paying off in full monthly. I also keep address/electoral roll details up to date. All by the book stuff.

However, in July I upgraded my HSBC graduate account to Advance account, and also opened a First Direct account, in order to open their high interest saving accounts. I believed that since I wasn't applying for credit as such (no credit card or overdraft) I would only have soft searches carried out. However I had two hard searches carried out in this short space of time, which presumably the bureau algorithm read as me having been desperate for credit, which is certainly not the case.

Trying to access preferential savings accounts has bounced back, hard, and I'm very concerned about how long it will take to recover to the scores I had 2 months ago, if ever, and get preferential mortgage deals when the time comes to applying for a mortgage. I've read somewhere that credit searches don't impact after a year, and are removed from history after 2 years. Does this mean if no other changes were to happen, my scores would jump back up to their previous value this time next year?

Any advice or reassurance would be much appreciated. I feel hard done by that my score no longer reflects my good credit behaviours and worry that it won't recover. Are they any steps I can take to improve my situation?
Thanks.

[Deleted User]

Your score isn’t a factor used in lending so you can safely ignore it as much as lenders do.

A mortgage advisor or lender will not look at the scores either.

camelise

!!! wrote: »

Your score isn’t a factor used in lending so you can safely ignore it as much as lenders do.

A mortgage advisor or lender will not look at the scores either.

Thanks for the reply Gary. What are the factors used in lending, if not any of the factors used to generate a credit score? Surely mortgage advisors and lenders still look at the same credit file/history, and could generate a similar 'score'.

[Deleted User]

They look at the same factors, but generate a very different score. One which reflects your risk, rather than a very generic number designed to keep you hooked.

Willing2Learn

camelise wrote: »

What are the factors used in lending, if not any of the factors used to generate a credit score? Surely mortgage advisors and lenders still look at the same credit file/history, and could generate a similar 'score'.

Lenders score you against their independent policies and lending criteria, using the data held in your credit file, added to the data you submit in your credit application, added to the data they may already hold on you as an existing or returning customer.

camelise

Deleted_User wrote: »

They look at the same factors, but generate a very different score. One which reflects your risk, rather than a very generic number designed to keep you hooked.

Okay, thanks. So to rephrase my original question. How long would it take for the couple of hard credit searches that have been undertaken on my file in short succession to no longer have an impact on my 'score'. I.e. recover back to whatever imaginary score whichever lender generates before and after such searches are added to your history.
Thanks.

[Deleted User]

That's not a question that has an answer. Or rather, the answers are today, some time in the future and never.

Lenders will look at your file and take their own view. A couple of searches is of no concern to many lenders on a well managed file.

For others, they may be concerned you're hunting for credit, especially if you're young or rubbish with credit.

Manage your credit responsibly and you'll be fine. You can then award yourself any score you wish.

Personally, I gave myself 1,600 and that's out of 999.

Willing2Learn

A lender may be concerned with you having a few searches over a short time...as it could indicate desperation for credit...and therefore a higher level of risk. Your 'credit score' that you see via Clearscore, Experian or TransUnion is not considered.


I personally would not be worried about having a couple of recent searches on your file...regardless of the fact that it lowers your 'credit score'

camelise

Deleted_User wrote: »

That's not a question that has an answer. Or rather, the answers are today, some time in the future and never.

Lenders will look at your file and take their own view. A couple of searches is of no concern to many lenders on a well managed file.

For others, they may be concerned you're hunting for credit, especially if you're young or rubbish with credit.

Manage your credit responsibly and you'll be fine. You can then award yourself any score you wish.

Personally, I gave myself 1,600 and that's out of 999.

So on the day of a mortgage application, I'll be gambling not knowing what risk will be attributed to me. I am young but believe I have a good credit history (albeit a relatively short one) where I have paid off all credit in full monthly, kept utilisation low and never had a late payment. The credit scores that the CRAs have given me indicate that they currently think I'm rubbish simply because I opened a couple of accounts to take advantage of their interest rates and allow my money to grow (without looking for credit). I see the point you're all making, and appreciate the advice, but haven't been reassured that I can go into a bank tomorrow and get a good mortgage with a good rate, and don't know when that date would ever come if I'm led to believe I shouldn't trust CRA scores. I hope this makes sense. It all sounds like a big gamble to me.

camelise

Willing2Learn wrote: »

A lender may be concerned with you having a few searches over a short time...as it could indicate desperation for credit...and therefore a higher level of risk. Your 'credit score' that you see via Clearscore, Experian or TransUnion is not considered.


I personally would not be worried about having a couple of recent searches on your file...regardless of the fact that it lowers your 'credit score'

Thanks Willing2Learn. On the day of a lending application, are you able to explain to the lenders what the searches were related to and your reasoning for opening such bank accounts, or is it purely a algorithmic risk factor that you have no negotiation in influencing?

[Deleted User]

There's no gamble at all. Think about what lenders want to see.

Low risk customers, low or minimal debt, with experience of managing credit (eg a credit card), and who live where they say they live. It's as simple as that.

Don't pay late, don't get into significant debt, don't default or get a CCJ.

If you want to post up details of what account appear on your three files, we can give a more accurate assessment. But there's little to worry about from what you've posted.

And if you're really worried, use a broker.