Don’t follow credit Karma advice

Jrchmn

For some time credit Karma and credit club have been said that I need to utilise my cred more. I have a credit limit of £2000 and typically use £1 per month. Credit Karma also advised that I had “lots to do” regarding my credit limit and should initially seek to up it to £4000 with an aim of £15000. I carefully read through the advice on here and other sites and decided that a 0% on new purchases credit card was a wise move. Credit club listed a 90% chance of acceptance on a Barclay card that was a perfect fit. Credit Karma listed a 100% chance of acceptance on a Virgin money credit card that was a less good fit. Stupidly I applied for the Virgin money card through credit Karma yesterday. Almost immediately I received an email from credit Karma saying my excellent credit rating had reduced to good. Today I received an email from Virgin money saying my application had been rejected so it’s a forgone conclusion that my credit scores with the other 2 credit check agencies are nose diving too. 
It’s taken me years to get my excellent credit rating and I’ve lost it in 24hours because I trusted credit Karma. I can only hope there’s plenty of bad karma headed their way. 

[Deleted User]

Don't worry about either the advice from the CRAs or the scores they give you.  They're both misguided and worthless.

Just use your card as you want and clear in full each month.  One search won't have done you any harm at all.

sourcrates

People really pay far too much attention to meaningless numbers.

The main credit reference agencies are buisnesses, they need to generate cash flow, one of the ways they do this is by selling credit improvement products to people, the whole essence of the site is to sell you stuff you don`t know you need, getting you obsessed with the "number" telling you to do this, do that, this improves that, your score has gone up, your score has gone down, its all rubbish, why do you think the telly adds promote your "credit score" so much, its all geared up to make money from you.

Jrchmn

This is the credit file and ratings board it’s all about those meaningless numbers. As to why I pay so much attention to them about 7 years ago my rating was very low through due to associations with my x. I was then the victim of identity fraud. At that point I had a car loan but no credit card. I was unable to get a mortgage despite a large deposit. I switched bank account paid off the car loan  and sent off for my credit records. I had my credit record amended where possible and was able to get a mortgage and credit card with my bank within 18 months. I do pay off my credit card in full each month. I cannot use the credit card I’d like to use as I have one card and now no chance of getting a better card. My credit score has already gone down. If I had applied for the Barclay card I wanted I would have been upset to be in the 10% refused but would have felt it fair as I knew there was that risk. This card however said 100% chance of acceptance. When I followed the link to Virgin money it said I’d been pre approved and so long as the details I gave were correct I would get the card. That was not the case. 

[Deleted User]

Now that you know the scores are meaningless, you should be able to relax a bit.

Remember that as lenders only ever look at the data on your files, as long as that is accurate and well managed, your score can be anything you want.

Another card or two would do no harm though in terms of building history.

Grumpy_chap

Jrchmn said:

Credit Karma  credit limit and should initially seek to up it with an aim of £15000. 

This seems to be a common target from Credit Karma.  They make the same recommendation for me and there was another thread recently says the same thing.

Jrchmn

Grumpy_chap said:

Jrchmn said:

Credit Karma  credit limit and should initially seek to up it with an aim of £15000. 

This seems to be a common target from Credit Karma.  They make the same recommendation for me and there was another thread recently says the same thing.

Thank you that is useful to know. I wouldn’t want a credit limit that was more than 4 times my disposable so wasn’t going to aim at £15000. Doubling the current limit especially with 0% on purchases would have been a good move but £15000 is just excessive. 

Jrchmn

Deleted_User said:

Now that you know the scores are meaningless, you should be able to relax a bit.

Remember that as lenders only ever look at the data on your files, as long as that is accurate and well managed, your score can be anything you want.

Another card or two would do no harm though in terms of building history.

Much of my previous posts has specifically said that I know from bitter personal experience that scores are not meaningless. It cost me money and limited my choices. 
Another card or two? The golden rule when you’ve been turned down is not to compound the damage with more applications! Instead I will follow the advise in Martin Lewis’s articles. I will start utilising more of the credit I have but not utilise more than 50%.  In a few months I will try and increase the credit limits on my current lines of credit. Then if my credit rating is back to what it was and credit club says I’m am likely to be accepted for a 0% card I will consider applying again. 

[Deleted User]

I'm afraid that's all nonsense. 

As lenders, we don't see the fictional scores - and if we did , we would ignore them.  Credit worthiness is based on risk criteria, and that varies by lender and by product. It's never been about a random number from a third party. Remember that credit scores react to change, hence your score drop - lenders react to risk. They are very different things.

You have one low limit card. Try another application in a month or so for another card.

If you believe that one search on your file has made you a higher risk, then you're very wrong. Why do you think that would have a significant impact?

Your golden rule is also nonsense. A couple of applications is fine.  If declined a second time, leave it a month or two.

With regard to utilisation, if you're clearing in full, it's not an issue.

You can choose to make yourself look better to lenders, or to the CRAs.  But only one group will lend you money .

sourcrates

It beats me why folk are obsesed with obtaining credit all the time, i just use my salary to pay for stuff now, maybe give that a try instead ?

Jrchmn

sourcrates said:

It beats me why folk are obsesed with obtaining credit all the time, i just use my salary to pay for stuff now, maybe give that a try instead ?

Apart from my mortgage I'm debt free. I pay off my credit card in full each month and I have the recommended 3-6 month essential out goings in savings. I understand that those who have replied with advice on how to manage my credit are trying to be helpful but I have no issues with managing the credit I have.

One of the main points of my original post was that 100% acceptance on credit karma doesn’t mean 100%. None of the replies have commented on this and I’d really like to know if anyone else has encountered this problem.

For me one of the points of posting was to rant, document what had happened and hopefully get replies from others who had complaints about CRAs.

I find it puzzling that on a board dedicated to credit files and ratings most replies have been along the lines of credit ratings are meaningless and credit files don't matter.

We all have different reasons for interest in our credit files and ratings. I have explained many of mine in my posts above and I have many more however my post was not about my reasons. My post was about a specific incident with credit karma.