Current account balance increases and credit score goes down???

ToneP

Hi folks.
I'm puzzled by this problem. Credit karma use Transunion to inform their scores.
My score has taken a significant dip because one of my current accounts, with a healthy balance and no overdraft facility, has increased by £400. There are no other changes at all & it is this change that is the one they are claiming is a negative factor.

I'm totally baffled as to why this should result in a lower score. I've now got more money and no debts whatsoever but it's classed a a negative thing for a credit score.
It's not a problem as I have no intention of applying for anything but it does undermine any confidence in this credit scoring lark.
Can anyone explain this bizarre way of calculation?
Thanks

BoGoF

AFAIK your current account credit balance is not reported to the CRA's so that should not be the reason your 'score' has dropped.

However as the score they give you means very little then don't worry about it.

ToneP

Thanks for the response.

That's exactly how I thought it should work but it clearly doesn't as they are including a positive current account balance within the score and deliberately claiming that this is what has caused the change.
I have no worries about it, it just makes the whole thing a bit pointless.

Willing2Learn

ToneP wrote: »

That's exactly how I thought it should work but it clearly doesn't as they are including a positive current account balance within the score and deliberately claiming that this is what has caused the change.
I have no worries about it, it just makes the whole thing a bit pointless.

You are incorrect with your conclusion. There is some other factor that has impacted on your 'score'. A credit balance is irrelevant. A CRA 'credit score' fluctuates with any changes to your credit file...


Anyway, a typical lender will neither see nor use your CRA 'score'. A typical lender will score you against their independent criteria and policies using the data held in your credit file, added to the data that you submit in a credit application, added to the data they may already hold on you as an existing or returning customer.

In other words, trying to improve a fictional 'credit score' is an irrelevant use of your time and energy. Instead, try to focus on ensuring your credit file data is accurate.

Happy new year!!

BoGoF

How do you know they are 'using' a positive credit balance. I have checked my Transunion report and all my current accounts show £0 balance despite them being in credit. The CRA does not know what your bank balance is unless negative.

[Deleted User]

Ignore the score.
It’s not a reflection of your credit worthiness to lenders.

What makes you believe the current account has anything to do with this?

bazzyb

If your current account shows a £400 balance then it is reporting that you are £400 overdrawn. This will be why it is shown as having a negative impact.