Everyone always says on here your credit score means nothing, no one uses it or sees it etc...

[Deleted User]

TurningANewLeaf wrote: »

Curious, why do you think a CRA would bother to give a different score they generate for a letting agent to the "made up" score they would give me?


I mean what would be the purpose on having two different methodologies?

There's many more than two.

There's the made up one for you, and one for each of the unique products and lenders that request one.

A score can only have meaning for a specific purpose and criteria, not a one size fits all stab in the dark.

Ben8282

The CRA's generate scores as part of their marketing strategy. They charge those who are foolish enough to pay a subscription to see their score and be exposed to marketing material to encourage them to apply for credit products that in the opinion of the CRA are suitable for them.
Even those who choose not to fall into the paying to see their score trap and use free services are still exposed to the marketing material for financial products.
Obviously the CRA's and providers of the free services receive a financial consideration, be it paid advertising, a referral fee or commission or whatever, from the credit card providers. Experian do not recommend suitable financial products as a favour to you.

Rather than take the 'credit scores are meaningless' approach I will instead go as far as to say that the credit scores probably do to some extent reflect the data contained in the credit files and could to an extent be a very general indication of the credit worthiness of the individual based on their level of debt (as known to the CRA providing the score) and their account conduct (as known to the CRA providing the score). However, there are a number of other factors taken into account when assessing an individuals suitability for a particular credit product. One very important factor, for example, is salary which is not known to the CRA providing the score. Another factor would be a credit providers ideal customer. This will vary according to o the product being applied for. I would imagine that in assessing an application for a charge card Amex would like to be reasonably sure that the applicant was likely to pay in full every month. A credit builder card provider charging high interest would probably not be very keen on this type of customer and would be looking for a customer who, while never defaulting, was likely to keep an interest bearing balance on their card. This assessment could not be made from the credit score alone. To take an extreme example, if a lender decided their credit card was for married homeowners with 2 children, you would not get the card if you did not fit that profile, 999 credit score or not.
Any provider of credit who carries out a credit check will be looking at different things and therefore a universal score on which acceptance or decline was based without consideration of other factors would be meaningless.
Obviously large providers of credit have the ability to 'score' applicants themselves based on the content of the application form and the data received from CRA's which we are repeatedly informed DOES NOT INCLUDE THE SCORE.
However, CRA's do, I believe, offer a service to (smaller) companies where they assess the data provided to them by the company concerned and the information contained in public and their own records against the criteria advised to the by the company and can generate a score specifically for that application to that company for that purpose which the company can use to make their decision. This is the score that you would have been shown by the estate agent. If it happened to be identical to the score Experian provided to you that is PURE COINCIDENCE.

TurningANewLeaf

Deleted_User wrote: »

There's many more than two.

There's the made up one for you, and one for each of the unique products and lenders that request one.

A score can only have meaning for a specific purpose and criteria, not a one size fits all stab in the dark.

I mean I guess I could understand why big lenders might have different criteria and different priorities meaning they would want a unique score of their own to reflect that.


But are we really saying an independent letting agent and other small time businesses are going to sit down with a CRA to thrash out what priorities they have so that they get a unique score too? I'm still not really getting why they'd bother showing them a different score to me. Why not give those type of businesses who aren't really that bothered the same score they give me, I'm not sure if I see the purpose of giving them a 'bespoke' score that I don't see. And giving me a 'bespoke' score that they don't see.



Shame I didn't go straight back home and check my score to see if they aligned, but back in those dark days I buried my head in the sand, so the last thing I wanted to see was how bad my score was.


But next time something like this happens I'm gonna check!

[Deleted User]

Yes. Of course different lenders will have different scoring mechanisms due to different levels of risk.

Lender A. might view you as a low risk based on your circumstances and will happily lend you credit knowing they could makes some money out of you, whereas Lender B. might view you as a high risk based on your circumstances and not want to risk lending you money.

A mortgage lender might view you less favourably than a credit card lender as well due to the differences in lending criteria - amount of possible debt, length/term of debt, interest, affordability etc.

There’s no generic “one score fits all” for everything and everyone.

TurningANewLeaf

Ben8282 wrote: »

The CRA's generate scores as part of their marketing strategy. They charge those who are foolish enough to pay a subscription to see their score and be exposed to marketing material to encourage them to apply for credit products that in the opinion of the CRA are suitable for them.
Even those who choose not to fall into the paying to see their score trap and use free services are still exposed to the marketing material for financial products.
Obviously the CRA's and providers of the free services receive a financial consideration, be it paid advertising, a referral fee or commission or whatever, from the credit card providers. Experian do not recommend suitable financial products as a favour to you.

Rather than take the 'credit scores are meaningless' approach I will instead go as far as to say that the credit scores probably do to some extent reflect the data contained in the credit files and could to an extent be a very general indication of the credit worthiness of the individual based on their level of debt (as known to the CRA providing the score) and their account conduct (as known to the CRA providing the score). However, there are a number of other factors taken into account when assessing an individuals suitability for a particular credit product. One very important factor, for example, is salary which is not known to the CRA providing the score. Another factor would be a credit providers ideal customer. This will vary according to o the product being applied for. I would imagine that in assessing an application for a charge card Amex would like to be reasonably sure that the applicant was likely to pay in full every month. A credit builder card provider charging high interest would probably not be very keen on this type of customer and would be looking for a customer who, while never defaulting, was likely to keep an interest bearing balance on their card. This assessment could not be made from the credit score alone. To take an extreme example, if a lender decided their credit card was for married homeowners with 2 children, you would not get the card if you did not fit that profile, 999 credit score or not.
Any provider of credit who carries out a credit check will be looking at different things and therefore a universal score on which acceptance or decline was based without consideration of other factors would be meaningless.
Obviously large providers of credit have the ability to 'score' applicants themselves based on the content of the application form and the data received from CRA's which we are repeatedly informed DOES NOT INCLUDE THE SCORE.
However, CRA's do, I believe, offer a service to (smaller) companies where they assess the data provided to them by the company concerned and the information contained in public and their own records against the criteria advised to the by the company and can generate a score specifically for that application to that company for that purpose which the company can use to make their decision. This is the score that you would have been shown by the estate agent. If it happened to be identical to the score Experian provided to you that is PURE COINCIDENCE.

Yeah, I think that's a good explanation. I agree with you as well, that I don't think the scores they give me are 'meaningless', I mean at the very least they are an indication of how healthy you are looking to common lenders, although clearly some are going to have the bar set lower than others, and others might have some very specific criteria.


Just on a sidenote, those credit building card providers like Vanquis, I think they'll accept just about anyone despite CCJs and defaults... I mean they accepted me!

[Deleted User]

TurningANewLeaf wrote: »

Yeah, I think that's a good explanation. I agree with you as well, that I don't think the scores they give me are 'meaningless', I mean at the very least they are an indication of how healthy you are looking to common lenders, although clearly some are going to have the bar set lower than others, and others might have some very specific criteria.


Just on a sidenote, those credit building card providers like Vanquis, I think they'll accept just about anyone despite CCJs and defaults... I mean they accepted me!

The CRA scores are nowhere near an indication.

5 minutes of searching on this forum will show you that bankrupts get given “top” 999 scores, people with no credit history get 999 scores, people with “perfect” credit get 999 scores but get refused for £20 per month phone contracts, yet those with 300 scores get £350k mortgages.

Go figure.

Different lenders have different commercially sensitive lending criteria.

Estate Agents only perform soft searches anyway so there’s no way they would see you accounts to be able “score”
you anything like Experian or any other CRA would anyway.

Reference: https://www.checkmyfile.com/articles/2921/credit-check/what-landlords,-employers-and-lenders-see-on-your-credit-report.htm

Ben8282

TurningANewLeaf wrote: »

I
But are we really saying an independent letting agent and other small time businesses are going to sit down with a CRA to thrash out what priorities they have so that they get a unique score too? I'm still not really getting why they'd bother showing them a different score to me. Why not give those type of businesses who aren't really that bothered the same score they give me, I'm not sure if I see the purpose of giving them a 'bespoke' score that I don't see. And giving me a 'bespoke' score that they don't see.
!

You havn''t understood have you?
First of all, small business are not normally providers of credit in their own right.
Secondly, I am guessing that there is probably some sort of general letting agent criteria that small independent letting agents may sign up to.

I would like to add a further clarification of my opinion on the CRA generated credit scores.
I have made it clear that I do not believe that these scores, in themselves, have any meaning in terms of an individuals eligability for a specific credit product.
When I say that they could be 'indicative' I am refering to the fact that, the higher the score, the lower the probability that the credit files will contain seriously adverse information. I am assuming here that Experian would not give a 999 score to an individual whose credit files are littered with defaults and late payments and therefore, when a 999 score is seen, it is likely that when the detailed information contained in the credit files is examined, there will be no defaults, late payments etc. Similarly, when a low score is seen, a closer examination of the credit files will probably reveal something untoward to one extent or another.But that is all.
Unfortunately, we only ever get to see our own credit files and possibly those of close family members. I do not have access to the credit files of every member of this forum to sit and scrutinise and form an opinion as to the relationship between the score generated by the CRA and the information contained in the credit file.
It is also a fact that those who sign up to the credit score checking services are probably more likely to be individuals with a less than stellar credit history.
On the subject of bankrupts, I assume that as there will be no adverse information on the credit files, a 999 score would be awarded by default. Presumably the bankruptcy is not shown? Strange though.

PasturesNew

I've no idea what mine is - never been intrigued enough to check.

But, I did half notice some advert on the telly earlier for a free one - and it showed people sitting in a nice room, surrounded by nice things - then they were stripped away and replaced by beige walls.... then the voiceover said something about nice things happen if you've a good score. It was definitely "fear of God" stuff style..... the message was: "if you don't check your score and if you don't have a good score you can't have all this nice stuff that you want"

Personally.... I pay cash for what I want and I don't want/need the nice looking things in the advert as that's how you run out of money

mwarby

The score is probably more there to impress the person paying for it than anything else. it looks more impressive to see a score out of 999 than just a tick for not bankrupt/dro/iva etc tick or number of ccj tick to say found on electoral roll.

It probably also suits the sellers to not explain too much just that it uses Experian and gives you a score above this number all is good, between another 2 proceed with caution else reject. Ie let the users think it more powerful than it is and score just like the big boys get

TurningANewLeaf

!!! wrote: »

The CRA scores are nowhere near an indication.

5 minutes of searching on this forum will show you that bankrupts get given “top” 999 scores, people with no credit history get 999 scores, people with “perfect” credit get 999 scores but get refused for £20 per month phone contracts, yet those with 300 scores get £350k mortgages.

Go figure.

Different lenders have different commercially sensitive lending criteria.

Estate Agents only perform soft searches anyway so there’s no way they would see you accounts to be able “score”
you anything like Experian or any other CRA would anyway.

Reference: https://www.checkmyfile.com/articles/2921/credit-check/what-landlords,-employers-and-lenders-see-on-your-credit-report.htm

That is strange that they score people who are bankrupt and people with no history with 999 scores. I guess there are gonna be outliers here, and I guess their methodology here is start from a base score of 999, then start deducting points everytime something bad happens, like you miss a payment or something, rather than the opposite, starting from a score of zero then adding points everytime something positive happens, like making a payment on time, (which would make more sense to me).


But still though, just because these outliers exist, doesn't mean to say your score isn't some kind of indication on how well you're doing. I mean a person with a score of 180 I'm willing to bet, in general, is gonna have a lot less credit available to them than a person with a score of 900. Assuming both have 6 years worth of history and accounts open.


Also, back to the estate agent, they absolutely showed me a score on their screen, whether this score aligned with Experian, I couldn't say, but they 100% showed me a score!