Credit score has plummeted

ImAlanPartridge

Hi, credit score has been very good for a few months after working on it for years. Logged in yesterday and out of nowhere it is down to very poor, !!!!!!? The only thing that had changed is a bought a phone direct from Apple with Barclays and I’ve used Klarna (not missed a single payment on anything) How can my score drop by around 500 out of nowhere? 

bradders1983

You do know the score is utterly utterly meaningless, yes? Its a pretty number used for absolutely nothing.

ciderboy2009

You don't mention which credit reference agency it's plummeted on.  However it's probably something along the lines of they're about to start an advertising campaign saying how good their paid option is at improving your score.

As bradders1983 says - the scores produced by the CRA's are completely meaningless - as an example, when I paid off a £25k loan early my scores dropped massively!

Just use the free CRA reports to make sure that everything in your credit record is accurate - ignore the scores.

Malkytheheed

bradders1983 said:

You do know the score is utterly utterly meaningless, yes? 

Well obviously they don't! Thats why they are here, and why they are asking this question. 

jazzyja

I've been working extra shifts to shift my debt fast. My experian dropped. Only change was that I cleared my catalogue account. Makes zero sense. Just look at your history ignore the score 

Alex9384

Although the score is not seen by anyone, I think it can still indicate some problem if the drop is so huge. I would definitely check my credit files and look for any changes.

sourcrates

The score responds to change of any kind, as has been explained countless times on this forum.
It is not a good indicator of how your credit worthiness is viewed, as its nothing more than a marketing tool.

ImAlanPartridge

thanks for the replies.

i don’t get how it’s meaningless? I thought the whole point of your credit rating is to have a good score? Like I’ve said the only changes were a new phone loan (£500) and about £300 spent on Klarna, but surely this wouldn’t drop it into the poor category as I have not missed one payment in years. It says my chances of getting a loan or CC (not that I need one atm) is very low. 

Ebe_Scrooge

ImAlanPartridge said:

thanks for the replies.

i don’t get how it’s meaningless? I thought the whole point of your credit rating is to have a good score? Like I’ve said the only changes were a new phone loan (£500) and about £300 spent on Klarna, but surely this wouldn’t drop it into the poor category as I have not missed one payment in years. It says my chances of getting a loan or CC (not that I need one atm) is very low. 

The score generated by the CRAs is totally irrelevant - for a start, it's not even seen by a prospective lender.  A lender will take the data contained within your credit file, feed it into their systems, and come up with their own internal score.  The criteria they use will differ greatly from one lender to another - which is one reason why there cannot possibly be a "universal" score as generated by the CRAs.  The data within your file is what's important.  Things like a whole string of CCJs and late payments would be a no-no for most lenders, some lenders will overlook a few minor transgressions, some will only lend to those with a squeaky-clean file.  There is no "one-size-fits-all".  The "whole point" of your credit file is to demonstrate a history of responsible borrowing and repayment - borrowing within your means and always repaying your debts on time.

The score shown by the CRAs will go down whenever there's a change in your credit circumstances.  Open a new bank account, take out a new credit card, buy something on credit from DFS - the score will go down.  Win the lottery, pay off your mortgage and all your debts, be totally debt-free with a million quid sat in your bank - your score will still go down.

LordSomebody

However.... Something adverse may have led to such a significant drop, and the score serves a purpose if it alerts someone like OP to a problem.

Alex9384

I took out my 4th credit card over 2 months ago, it now shows on my files that I have 4 credit cards, but my Experian score remained on 999. Perhaps because this card was opened without a hard search?
It's from Halifax and I already have a current account with them.