Credit scores again, yes I know the score is totally meaningless but a question relating to this.

Graham1982

Hello everyone:
Should there be or is there some sort of regulator that credit reference agencies adhere to? I may be wrong but I think I have hit on something quite concerning:

Taking the principle that the numerical value and its fluctuation has no bearing on one's ability to get financial products and the financial institution that you are applying to determines your eligibility based on their own factors, this is misleading at best and contrived at worst, as it encourages you to purchase the products used to investigate the reasons for your score being low etc.

The thing that made this really hit home for me is this:

I have an account with Experian and with Totally Money, Experian scores me at 901 and Totally Money at 500 odd, the former is "excellent" and the latter "needs work".
Ok, it gets worse, sometimes I have clicked on Totally Money and it has generated "my" score even though I am signed out - another sign that this is all snake oil.
Also, Experian presets products to me that are far more favourable, Virgin credit cards, AMEX cards, all with good balance deals etc, whereas Totally Money shows me Fluid, 118 money, Dave's dodgy loans inc. Thus are they just acting as a funnel to financial providers and getting paid for these referrals? If so is this not in some way illegal if not unethical?

Thanks

Graham

PS These are half-baked theories so if wrong I am happy to be told this.

D3xt3r5L4b

Experian is Experian.
TotallyMoney use TransUnion (formerly CallCredit).

So different agencies will “score” you differently based on “their” assumption on your credit history. 

HWBY

Illegal no, unethical perhaps. While a marketing gimmick, they do serve a purpose - a lower score with an agency indicates that there are things you could improve. Of course, in the real world of credit and financial management no one actually assigns a numerical score to different parts of someone's financial history.

It's just the companies making money. While it depends on a certain amount of ignorance of the part of the consumer to think the score itself is important, that in and of itself isn't illegal, since the company doesn't say your score in and of itself will or will not affect your chances of getting credit.

SnowTiger

Graham1982 said:

Also, Experian presets products to me that are far more favourable, Virgin credit cards, AMEX cards, all with good balance deals etc, whereas Totally Money shows me Fluid, 118 money, Dave's dodgy loans inc. Thus are they just acting as a funnel to financial providers and getting paid for these referrals? If so is this not in some way illegal if not unethical?

In this context Experian and Totally Money are brokers, not financial advisers.

They probably use different methodology and data sets.

Dunno how you see your Totally Money score without being logging in.  My guess is you're looking at the advert on their home page, which gives me 614 live score.

Totally Money's complaints procedure here: https://www.totallymoney.com/info/complaints/

Experian's complains procedure here: https://www.experian.co.uk/consumer/product-factsheets/complaint-handling-procedure.pdf

Let us know how you get on.

Thrugelmir

Graham1982 said:

it encourages you to purchase the products used to investigate the reasons for your score being low etc.

Endless advice on MSE to ignore the "score". Simply by operating your personal finances in a responsible manner you'll build a decent credit history in time. People are simply impatient in the belief that doing x or y will somehow prove beneficial. Far too much overthinking and a lack of understanding. Rather than buy useless information either reduce your debts or save. Both will be better options. 

onlyfoolsandparking

I think there's an element of truth in your 'half baked theory' but it still draws the same old conclusion and while the CRA,s are still making money from encouraging the masses to try and improve their fictional score, why would they change? whether a credit score will ever serve any real purpose for us is still anyone's guess  

Thrugelmir

onlyfoolsandparking said:

I think there's an element of truth in your 'half baked theory' but it still draws the same old conclusion and while the CRA,s are still making money from encouraging the masses to try and improve their fictional score, why would they change? whether a credit score will ever serve any real purpose for us is still anyone's guess  

Without a "score" someone looking at their own history has no way of benchmarking it. The concept was probably dreamt up in response to endless queries!  

D3xt3r5L4b

Thrugelmir said:

onlyfoolsandparking said:

I think there's an element of truth in your 'half baked theory' but it still draws the same old conclusion and while the CRA,s are still making money from encouraging the masses to try and improve their fictional score, why would they change? whether a credit score will ever serve any real purpose for us is still anyone's guess  

Without a "score" someone looking at their own history has no way of benchmarking it. The concept was probably dreamt up in response to endless queries!  

Whereas now it just drums up a false sense of hope and reality 

MalMonroe

You actually have 'accounts' or files, as they call them, with every single credit agency in the UK. They all use their own systems. And when they say they have 'offers', if you are in the market for say, a credit card, just do a soft search for one that comes up trumps with a few of them. I don't think credit files are meant to be taken seriously. They don't 'assume' anything, they check your history very carefully. And so should you! Each and every lender uses their own criteria, and if you want to borrow, you have to jump through their hoops. They have the upper hand because they have the money. Nobody has a right to demand that lenders give them anything. If your credit history is poor, some lenders won't give you the time of day. If it's good, you may be lucky. But at the end of the day, you really don't have any comeback. If there are any mistakes on your file, you can report them and they will be investigated. Usually you have to write to lenders yourself to explain the problem and a note is placed on your file while investigations are underway. Credit agencies aren't doing anything wrong, or illegal, they're all complying with the rules. The trick is to not get in debt, use credit but use it very wisely (people who don't use credit can't demonstrate that they can use it wisely and lenders are suspicious of them)(I know!) and never, ever, go bankrupt!  I say these things as someone who has been in dire financial straits but who is now recovering, slowly, and realising at last that there's a system - and you cannot buck it.  I have learned the (very, very) hard way. But I HAVE learned!

Graham1982

Hello everyone:
Thank you for your replies. To be honest the initial post was hypothetical in nature, I do operate my finances sensibly (now) and believe that I would be a good risk for a lender as I use credit sensibly. I guess these files are good for checking erroneous information - for example you might have an unpaid debt that you might be unaware of. However, some may argue that if you are financially sensible then this would not be the case.

I guess my point was that yes whilst these brokers/agencies might not be doing anything wrong in selling the product that it is legal for them to sell etc, are they not somewhat like Bright House were? Whereas Bright House offered the financially irresponsible shiny things but with a crippling interest ratio/prospect of debt, as someone has mentioned above, these credit watcher/improve your credit file products promise false hope. As the number effectively belongs to the referencing agency with whom you purchase the improvement product, they can move you up a few points and make it look like you are doing the right thing arbitrarily.

I mean if you went to the Dr and he said you have terminal cancer but if you pay me £2,500 there is a wonder cure that will get rid of it, perhaps you would stump up the cash. However, to later find he/she has just sold you Smarties in a blister pack would be wrong.

Cheers

Graham 

Thrugelmir

Graham1982 said:

 Whereas Bright House offered the financially irresponsible shiny things but with a crippling interest ratio/prospect of debt, 

The interest rate charged reflects the risk and cost of default. Running a debt recovery / collections department is extremely expensive. Hence why all businessess set their criteria when granting credit to focus on their target markets.