Credit Utilisation issue

oblivion204

I recently re mortgaged and part of this process the bank said I had access to too much money and they were not happy. I was advised to cancel or lower my available credit on my credit cards. Some had limits of £8k (I think I have 6 cards in my wallet). Roughly I had access to around £45k but I’d never be a fool and spend that all.

So to keep them happy I lowered my limits and was accepted however I did query with them before I did this as I was concerned it may affect my credit score as my lower limits would affect my credit utilisation. They said it wouldn’t but on research I was sure it would.

As it now stands it clearly has affected my credit utilisation and my score is now down by a good 100 points.

Should I be overly concerned ?
Should I increase my limits to change the percentage of utilisation to increase my score again?
I’m only annoyed with the banks as they told me it wouldn’t change and I was correct in the fact that it did.

Ebe_Scrooge

There's no need to be concerned at all. The scores are seen by no-one except you and the CRA, they play no part whatsoever in a lender's decision. The scores will actually go down in response to ANY change in credit circumstances, good or bad, but they are completely irrelevant.

[Deleted User]

The key thing is to always ignore the score or you'll make poor decisions. A lender will certainly never care how many points you have or haven't got.

There's no need to rush into raising your limits. Generally you would leave them as they are and accept any increases, but you lowered them for a specific reason.

oblivion204

I have heard before the score itself is irrelevant. Why is this?

Every time I go for something and are accepted I am told your score was good and showing as high. I wonder exactly what it is then these companies are looking at and are they looking at a different version of Poor, Good or High?

I query this as my partner is currently showing as medium and is struggling to be accepted for a balance transfer card due to her salary. However if you disregard the score on its own and look at her history she has very little debt, never missed a payment and is in work. Beats me what they take into consideration on these matters.

[Deleted User]

They don't look at any version of your rating.

It's a lender's job to assess the risk you present against their criteria, so they take the raw data and process it themselves. Smaller lenders may ask a CRA to do this, but always to the criteria they have set. Any score mentioned by a lender is the score that they have given you internally.

The score is just a gimmick for the financially illiterate that helps to drive website traffic. Always focus on the data, as a lender would.

Ben8282

You were given foolish advice by this bank and should not have followed it.
You are now stuck with lower limits because you can't just raise them again after lowering them.

I would imagine that the mortgage lender would have been more concerned by the balance on your partner's credit card that they are unable to transfer due to their low salary than about your access to credit.

phillw

Deleted_User wrote: »

The score is just a gimmick for the financially illiterate that helps to drive website traffic. Always focus on the data, as a lender would.

It does give you a rough idea how an average lender might view you.

It's not a gimmick, but it's not gospel. It's somewhere between.

[Deleted User]

It's not even quite as accurate as that unfortunately as it measures change more than risk.

Some may be a rough guide, but for many it's nowhere near.