:( :( :( :( My credit score dropped 325 points

Belling93

Hi All,

I am devastated!! I woke up this morning to see my credit score has dropped significantly and I can't understand why. 325 POINTS!!!! IN 30 DAYS!!!! Why meee?!?
- We just bought our first house Sept 2021
- All my payments are up to date (except 1 missed payment last month)
- I have the same overdraft limits that I've had for the past 6months
- I am registered on the electoral roll 

I've done a couple of soft search on a new credit card but have not been eligible.

I've had poor credit and CCJ in the past (over 6 years ago) and I feel like I'm it's happening all over again.

I need some advice/quick fixes!!! What can I do? Can I pay something off in full?

Is it just a mistake because the new house/mortgage? Has this happened to anyone before? 

I want to launch my own business this year and now I won't be accepted for business loan will I? 

[Deleted User]

No need to be devastated at all. Your credit score is a made up number that no one other than you will ever see and would never care about if they did.

Apart from your missed payment, which you need to pay ASAP, nothing has changed. It's not great, but a minor hiccup on a well managed file. Check your three files periodically to make sure everything appears correctly. Don't carry debts if you don't need to.

With regard to your business loan - why will you not now be accepted?  Has your business plan changed dramatically? If so, rethink what the business is about and focus on the numbers to ensure they work. 

Exodi

Belling93 said:

I woke up this morning to see my credit score has dropped significantly and I can't understand why.

Belling93 said:

- All my payments are up to date (except 1 missed payment last month)

Now I'm no rocket scientist....

Pretty much agree with what zx81 said (in particular that your credit score is somewhat meaningless)..

EDIT: also, while irrelevant to the thread, am I right in understanding you bought the house while stuck in an overdraft then?

Belling93

Exodi said:

Belling93 said:

I woke up this morning to see my credit score has dropped significantly and I can't understand why.

Belling93 said:

- All my payments are up to date (except 1 missed payment last month)

Now I'm no rocket scientist....

Pretty much agree with what zx81 said (in particular that your credit score is somewhat meaningless)..

EDIT: also, while irrelevant to the thread, am I right in understanding you bought the house while stuck in an overdraft then?

Haha thanks non-rocket scientist!
No - we bought the house in August, I lost my job in September and took out an OD to help tie me over. Started my new job in November but haven't attempted to clear and reduce it. Does this too affect my credit score? If I reduce it, is it like cancelling a credit card? 

[Deleted User]

Get out of your OD but don't cancel it. Don't carry debt you don't need.

Your score will drop further when you pay off your debts, but don't be devastated about that either.

Exodi

Belling93 said:

Exodi said:

Belling93 said:

I woke up this morning to see my credit score has dropped significantly and I can't understand why.

Belling93 said:

- All my payments are up to date (except 1 missed payment last month)

Now I'm no rocket scientist....

Pretty much agree with what zx81 said (in particular that your credit score is somewhat meaningless)..

EDIT: also, while irrelevant to the thread, am I right in understanding you bought the house while stuck in an overdraft then?

Haha thanks non-rocket scientist!
No - we bought the house in August, I lost my job in September and took out an OD to help tie me over. Started my new job in November but haven't attempted to clear and reduce it. Does this too affect my credit score? If I reduce it, is it like cancelling a credit card? 

Oh I see, that's very unfortunate, I'm sorry to hear that.

To be clear here, there are two different matters to consider here -

Credit Score (e.g. Experian 612/999) - this is a made up number and is only visible by you. Lenders do not see this, nor care about this number. Most on this forum consider it generally meaningless, a very vague indication of someones credit worthiness at best.

Credit Report - this is the data about your financial circumstances (e.g. account balances you hold, payment history, missed payments, CCJ's, etc) - you can also view your credit report free online. Lenders do see this. If a lender has criteria that they won't lend to applicants who have missed a payment in the last 6 months, they will not approve you for a loan - regardless of whether your magic number is 500, 700 or 999.

Lenders will also view debts in different ways - a lender is likely to consider an applicant with a £2,000 credit card balance as far less risky than an applicant with a £2,000 payday loan or overdraft (as these are commonly used by people that aren't able to get low APR credit cards).

If I'm honest, I would make getting out of your overdraft your main priority, it is often not 'cheap debt'. Doing this would inevitably increase your credit score (if it matters to you).

Ebe_Scrooge

I'll reiterate what others have said regarding the score - it's as much use as a chocolate teapot, it's not used nor even seen by any lender, and plays no part whatsoever in any lending decisions.

However, I would be focussing all my attention on repaying the overdraft.  Firstly, it's a relatively expensive form of borrowing.  Secondly, it does reflect negatively on your credit file (nothing to do with scores, but a lender will see that you're carry an overdraft balance, which can be interpreted as a sign of financial difficulty).  Thirdly, an overdraft facility can be cancelled at any time - it's not very likely, but the bank would be well within their rights to contact you tomorrow saying they're removing the facility and demand immediate and full repayment.

Belling93

I hear you all loud and clear.
- Sack the overdraft
- Minimise any form of debt

Thank you very much for your helpful and supportive comments.

macman

And stop missing payments. Put regular ones on DD, then you can't miss them.

Stixalot

I wouldnt worry about the scores mine are all over the place at the moment one increased 160 points yesterday and one decreased 135 points all due to the fact i moved house and the other one didn't even budge they don't mean a thing just concentrate on repayments, electoral roll and keep your utilisation of credit sensible and affordable and you'll be fine.

Sncjw

Being in your overdraft and then applying for credit card screams to the lender your struggling to manage your money. Hence the likely reason you got rejected. 

Get out of your overdraft if you have the money to do so.