Credit score dropped 100pts on ClearScore?? 20 August 2021 at 6:13AM in Credit file & ratings 5 replies 232 views

Worriedandalone

Hi 
Between June and July this year my credit rating on ClearScore has dropped from 532 to 414 despite my debt actually decreased and all payments being made on time.
During this time the only change that has been made is that I took out a new credit card to do a balance transfer of £2k. Since then my debt on that has dropped significantly but my credit limit has gone from £13 to to £21k (the £2k my only short term debt). 

Is it normal for this to have dropped my credit score this much? I’d never have done the balance transfer has I realised.

MovingForwards

Please ignore the credit score and rating as they are not seen, or used, by financial institutions.

Credit report scores go up and down with any change.

Double check payment history and ensure your accounts are right. The balances will probably never tally with statements due to monthly reporting date by companies and when your new report is generated.

balbs

Yes formumite is right - ignore all those credit score numbers... Martin has written about this before on the site.    You will probably see the numbers climb back up after a couple of months but in any case they dont have much relation to your ability to get credit.

Ebe_Scrooge

As per the above, the score issued by the reference agencies is nothing more than a marketing gimmick designed to allow them to sell you products you don't need - and it has no bearing whatsoever on how lenders view you (they can't even see it).

The score will have dropped due to the new credit card - the score drops in reaction to any change in your credit circumstances, good or bad.  But it matters not one jot - as long as you're paying what you owe each month, this is what counts.

PeterT39

Well, the score may or may not be used by a variety of lenders, insurers and others to decide on whether to offer you products and at what price if so, but many look at the raw data and build their own scoring on the basis of that.  Clearscore uses Equifax's rating, though I understand they're about to move to a score out of 1000 instead of just 700, so you'll see it go up shortly.

Ebe_Scrooge

PeterT39 said:

Well, the score may or may not be is not used by a variety of any lenders, insurers and others to decide on whether to offer you products and at what price if so, but many look at the raw data and build their own scoring on the basis of that.  The score dished out by the CRA is not seen by any lender.  There are a tiny handful of smaller lenders who do ask the CRA to generate a customised (different from the one you see) score for them - but the vast majority, and certainly all the big players, have complex internal algorithms that take in the data and generate their own internal score.

Clearscore uses Equifax's rating, though I understand they're about to move to a score out of 1000 instead of just 700, so you'll see it go up shortly.  And if it does, what does that matter?  It's a meaningless marketing gimmick, nothing more.

Please see my comments in bold above.