Credit score has plummeted

sourcrates

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?

Obviously the advertising by the CRA`s is working extremely well, you don`t have a credit score in this country, not one that means anything anyway, the credit reference agencies deal with information, they used to sell you your credit report, now they also act as introducers, or what are more commonly refered to as "brokers", they entice you to check your fictional credit score, which they create, and then try to flog you so called "credit improvement products", such as cards and loans.

The scores they produce are loosely based on your circumstances, but, only you see it, the CRA`s do not lend money themselves, so the "score" you see, is pretty much redundant.

Lenders look at your file, and will score you using their "own scoring method", to see if you correspond to their customer profile, if they like you, your in, if not, you aint.

So your credit score may have a loose resemblance to how you manage your financial affairs, but in itself, its totally meaningless, the hype around the scores is created by the CRA`s just to sell you things, and make them money, nothing more.

ChampagneSupernova36

I wondered about this because I’m now debt free after I finished my DMP, have my phone contract and a credit card with a small limit and my score has gone through the floor. According to the MSE credit club my utilisation of credit is actually Too low Lol. So gotta find that Goldilocks zone I suppose 

D3xt3r5L4b

ChampagneSupernova36 said:

I wondered about this because I’m not debt free after I finished my DMP, have my phone contract and a credit card with a small limit and my score has gone through the floor. According to the MSE credit club my utilisation of credit is actually Too low Lol. So gotta find that Goldilocks zone I suppose 

Did you read any of this thread?
You need to ignore the scores and ratings. 

Malkytheheed

I did suggest that it would be better if we had 1 score that actually did mean something like FICO in the US. To clear all this confusion we get on a daily basis but was readily shot down on here. 

Ebe_Scrooge

Malkytheheed said:

I did suggest that it would be better if we had 1 score that actually did mean something like FICO in the US. To clear all this confusion we get on a daily basis but was readily shot down on here. 

The problem is that every lender has different lending criteria.  What makes you an excellent prospect in the eyes of one lender would make you only "fair" in the eyes of another lender.  So there can be no one universal score - the only way a lender can decide is to look at your data and see how it tallies up with their own internal scoring sheet.  A simple example - those payday loan companies would happily lend to people that the more mainstream lenders wouldn't touch with a barge-pole.  Mainstream lenders generally lend to people who have a reasonable chance of repaying, and charge them a reasonable interest rate.  Payday loan companies are willing to take the chance that they may not be repaid, but charge a very high interest rate to cover that risk.  That's probably over-simplistic, but that's the basic principle.

LordSomebody

eliotrasiqa said:

Alex9384 said:

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.

 yes? Its a pretty number used for absolutely nothing.

Except that it’s prompted OP to come and ask about their credit file, and they have been pointed to go and look at the data, where they may find a problem they wouldn’t otherwise have noticed.

I understand that the numbers aren’t used by lenders and are open to manipulation for marketing purposes. But all those here who constantly dismiss them as entirely rubbish are blindly missing the point there is some use to them.

You don’t blindly follow the traffic light at a junction, do you? They’re useless for telling you if it’s safe to actually go. You look for yourself to avoid having an accident. But you wouldn’t say that a traffic light is pointless.

phillw

ciderboy2009 said:

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!

Why would you say that was meaningless?
It's kinda suspicious that you would pay off a loan early and then be taking out credit again straight away.

Jrchmn

To the OP. I’m really sorry to read this has happened, it’s so frustrating when there are no clear answers. All you can do is carefully check your full credit report for the next few months in case there are any mistakes. As you aren’t looking to take out a credit card it won’t affect you adversely in the short term and after 6 months of properly managing your new accounts your score should increase again.

Have you had accounts with either Klara or Barclays before? If so it’s possible they have shared information from previous accounts such as linked addresses. In my experience there’s a lag between changes to my credit score and new information appearing on my full credit report.

D3xt3r5L4b

Jrchmn said:

To the OP. I’m really sorry to read this has happened, it’s so frustrating when there are no clear answers. All you can do is carefully check your full credit report for the next few months in case there are any mistakes. As you aren’t looking to take out a credit card it won’t affect you adversely in the short term and after 6 months of properly managing your new accounts your score should increase again.

Have you had accounts with either Klara or Barclays before? If so it’s possible they have shared information from previous accounts such as linked addresses. In my experience there’s a lag between changes to my credit score and new information appearing on my full credit report.

But, again, the score has nothing to do with anything when it comes to your credit worthiness to a prospective lender...

Alex9384

eliotrasiqa said:

  yes? Its a pretty number used for absolutely nothing.Kodi  nox

I know this.
I said, there may be a reason when the drop is HUGE and sudden. Such as, fraudulent loans taken in your name, multiple hard searches, etc. So if the score drops drastically, I would definitely go through my credit reports and check every single account shown in there. It doesn't matter that lenders don't see your "score" has dropped. There are still good reasons to check your credit files when it happens.