ClearScore seems to have mad data?!

Danvers23

I applied for a loan online today. I was told initially I was eligible for a rate of around 6% based on my income, however when I put in the application was only offered 13.5%.

I figured I must have a bad credit score (for no reason I could see) so checked ClearScore, where it says I have a good credit score but on my affordability score it says there’s £5000 more going out of my accounts than coming in. This is crazy - there’s nowhere near this amount going out. And obviously any more than does go out has to first come in (usually from my business account - I’m self employed)

where could these figures have come from?? 

MorningcoffeeIV

The scores mean nothing and Clearscore don't know what you have incoming or outgoing.

If you're interested in what the CRAs show, check your credit files, not any of the surrounding nonsense of scores or commentary. 

Danvers23

I’ve linked my accounts with the ClearScore app so technically they do have sight of income and outgoings - but this discrepancy figure they’ve come up with is incorrect. 

MorningcoffeeIV

That's why you can ignore it. No one but you will ever see those figures.

Make sure you delink your accounts from the app.

Danvers23

Ok thanks. So if the lender I applied to can’t see that number, then I’m confused why I was offered such a poor interest rate when I’d previously been told I’d be eligible for a much better one based on my income. My credit score is apparently ‘excellent’. 

I don’t want to apply to another lender without getting to the bottom of it as then I run the risk of lots of credit checks showing up on my file. 

MorningcoffeeIV

The lender will assess you against their own criteria.

Whether your credit score is excellent, mediocre or diabolical is of no interest to them.

Check your credit files and apply for a product better suited to your risk profile.

Danvers23

I’m not sure what you mean by my ‘credit files’ - I thought that’s what I have been checking on ClearScore, Experian etc? And haven’t found anything that would threaten to cause a problem. 

I’m not sure how I can apply for a product better suited to my risk profile when I have no idea what my risk profile is, nor of how different products and lenders determine suitability.

MorningcoffeeIV

Your credit files are the data held by Experian, Equifax, and TransUnion. Not the comedy scores they provide. 

You assess your risk profile via the data held, ie debts, repayments, defaults, associations, etc.

If you're still uncertain, try a lender's eligibility checker 

Danvers23

Thanks but I’m still none the wiser. 

I ran the lender’s eligibility checker first, entered all my income and outgoings, they said I was eligible for a rate of 5.9%. Completed the full application and was offered the loan at 13.5%. There’s nothing on my credit file to cause a problem - I’ve never missed a mortgage payment or any other payment. So I can’t work out why the rate would be so different. 

Sure, I could just ditch them and try someone else, but if this is going to happen again I don’t want to run up loads of checks. Other lenders’ eligibility calculators also give me OK rates but I’m now doubting this is what they’ll actually offer me when I put in a full application. 

[Deleted User]

All of it is an algorithm.
The rates shown and the offers shown are generic, they're not tailored to a real person until the lenders, specifically, assess them in their own in-house scoring methods.

Those generic rates will show a sentence that states the figures are 'representative' (google that phrase) and will be provided to a certain percentage of the population - that means not to every single person on that applies.
Your application is clearly one that's in the remaining percentage.

There are hundreds of posts, exactly the same wording as yours, all over this money section asking the same question, search them and spend a lot of time reading because it will become crystal clear how lenders work - it will be worth it.

MrFrugalFever

Did you apply through a broker site such as Clearscore or did you go direct through a lender? Was it your main bank or another provider?

To be absolutely certain on data held about you, go direct to Experian, Equifax and Transunion and request a Statutory Credit Report. This is FREE and almost instant with both Equifax and Transunion but with Experian you will need to wait for snail mail to give you a code.

The reason I say this is because in actual fact Clearscore (representation of Equifax) has me down as NO Public Information held (insolvencies etc) when in actual fact on Equifax report I DO as I still have 11 months left of a discharged IVA to drop off my report under the 6 year rule. So incorrect data.

1 hard credit search will no affect chances of obtaining credit but 2 without success may do, at that point you wouldn’t be wise to wait 3+ months before applying for anything again.

I do know that also, as someone who is self-employed, you could be viewed by some lenders as higher risk due to a fluctuating income as opposed to fixed.