Score movement

Rosie677030

With apologies if this has been covered before BUT are the CRAs and/or associated apps in bed with other companies and financial services? ( I'm thinking in particular of Credit Karma ). Would it be inconceivable that a service like Credit Karma tells you that you're score has gone and then at a random point of their choosing, drops it down a little so that you investigate financial products that they "suggest" will help? Are they on commission ? And if it's the case that scores are moved when they decide, as opposed to being wholly based on your financial behaviour etc, surely that is incredibly unethical?

MorningcoffeeIV

That's pretty much it, in a nutshell. Regular movement, especially drops, in the scores is essential to keep people coming back.

MalMonroe

And also, in my experience, Credit Karma is the one that gives you the lowest score ever. For no good reason. I generally just delete their emails and messages without reading but today I read one from them telling me "well done, your score is moving towards 'good'." Absolute nonsense. Clearscore (by Equifax) on the other hand, has had me at 1000 excellent - great credit history - for months on end. Experian the same good score. Two out of three 'greats' isn't bad, I reckon. 

But as we all know, those scores mean absolutely nothing. You can read their blurb but you don't have to apply for anything. I guess they are allowed to advertise though. 

If I did want to borrow - which I don't - I'd do my own research very thoroughly before deciding which steps I wanted to take. I've never been very good at being told what to do. Especially by credit report agencies.

They can suggest anything they like, you can ignore everything. 

My own thoughts and opinions of course but I've learned the hard way (crippling debt, now debt-free) not to be a follower. 

MattMattMattUK

They are as you suspect, marketing gimmicks. I keep an eye on my credit reports, but as part of that process they keep pushing "ways to improve your score" most recently one of them decided to lower my score and suggested to get it to go up again I should apply for a new credit card as they recommended I had £20k or more of card limit and that I increase my utilisation to "between 1% and 35%". My current credit card limits total £18k and my utilisation is 0% because I pay in full every month, but their recommendation is that I open more credit cards and get myself into debt, which is the exact opposite of what a financially sane person should be doing and is not what lenders want to see potential or existing customers doing, but they were attempting to entice me into opening a product for which they are paid permission.

Personally I think any form of credit rating in the marketing gimmick sense should be banned. Companies should be able to use credit scoring for their internal lending criteria, but it is unacceptable that "credit scores/ratings" are pushed in some pseudo official way when they are purely a marketing gimmick.

Rosie677030

Thankyou all. I really appreciate your candour and insight. If Martin hasn't yet publicly railied against this unethical manipulation then he should.

[Deleted User]

We all agree ! 

Every day there's a new member, on here, worried to death about their score and think they must jump through hoops of fire to get it back up to the highest possible number.

Rosie677030

[Deleted User] said:

We all agree ! 

Every day there's a new member, on here, worried to death about their score and think they must jump through hoops of fire to get it back up to the highest possible number.

It's dreadful and incredibly unethical. Surely there should be strict regulation when it comes to this kind of thing, as there will always be those who take the "advice" of the likes of Credit Karma and buy into financial products they don't need and will only compound the problem.

CliveOfIndia

As others have said, your CRA score is actually irrelevant, since it's not used - not even seen - by any lender.  Yes, it's pretty much just a marketing gimmick, and one which has almost no value whatsoever to the consumer.

This may be a slight generalisation, but on the whole your score tend to drop in response to any change in your credit circumstance, whether good or bad.  Take out a new credit card, your score will drop.  Apply for a loan, your score will drop.  Win the lottery, pay off every debt you have, including the mortgage, your score will drop.  The score tends to gradually rise in response to long periods of stability.

I guess potentially it may have one use.  If you suddenly see it drop for no reason you're aware of (i.e. your credit circumstances haven't changed), then it's worth checking your files just to make sure someone hasn't taken out a loan in your name, or a default has been incorrectly recorded, or whatever.  But aside from that, you can pretty much ignore it.

amandaab

I hope I’m not breaking any forum etiquette by commenting, but I’m really relived to read this.

I signed up to Experian a couple of months ago, not the paid version though. When I checked my score on there it was in the excellent range. I checked it the other day and it had dropped by 224 points! Nothing has changed, I didn’t apply for any more credit or anything and I only have one credit card that I’m using and I pay it off within a week of using it, just so that I have something on my file. I have no idea what happened.

My bank does a free trans union credit score check on the app, it updated today, and my score is still at the top of the excellent range. 

I did wonder if Experian were maybe trying to lure me into signing up to the paid version. If that’s the case, it’s a horrible thing to do to people! 

MalMonroe

amandaab said:

I hope I’m not breaking any forum etiquette by commenting, but I’m really relived to read this.

I signed up to Experian a couple of months ago, not the paid version though. When I checked my score on there it was in the excellent range. I checked it the other day and it had dropped by 224 points! Nothing has changed, I didn’t apply for any more credit or anything and I only have one credit card that I’m using and I pay it off within a week of using it, just so that I have something on my file. I have no idea what happened.

My bank does a free trans union credit score check on the app, it updated today, and my score is still at the top of the excellent range. 

I did wonder if Experian were maybe trying to lure me into signing up to the paid version. If that’s the case, it’s a horrible thing to do to people! 

Hello, yes it could be that they wanted you to sign up to the paid version but I've never needed any more information than I can get from the free versions. And now I've learned how to manage my money I just apply Martin's mantras to everything financially connected. See below. The scores mean nothing to anyone, not even you. My scores have started moving around now but it's only because I've started using my new 0% purchase credit card. I think if you sneeze your score changes. Nothing to worry about.

You can do your own TransUnion credit check as well, if you want to. No reason for your bank to get involved. You can also do Equifax - (and/or Clearscore which is run by Equifax). I like their scores better as they are always higher and kinder. And also, just as useless.

With your credit card you could set up a monthly direct debit to clear the balance, that works just as well as clearing it within a week of using and it means that payments are never missed. 

Hope that helps. Here are the mantras I mentioned earlier - 

FreeFallerSaver

amandaab said:

I hope I’m not breaking any forum etiquette by commenting, but I’m really relived to read this.

I signed up to Experian a couple of months ago, not the paid version though. When I checked my score on there it was in the excellent range. I checked it the other day and it had dropped by 224 points! Nothing has changed, I didn’t apply for any more credit or anything and I only have one credit card that I’m using and I pay it off within a week of using it, just so that I have something on my file. I have no idea what happened.

My bank does a free trans union credit score check on the app, it updated today, and my score is still at the top of the excellent range. 

I did wonder if Experian were maybe trying to lure me into signing up to the paid version. If that’s the case, it’s a horrible thing to do to people! 

I don't understand why you would pay your credit card off within a week of using it? Not only is it not taking full advantage of using the card for what it is designed for, but the fact that you do this likely means there is actually nothing 'on your file' each month for other financial institutions to see, since your credit card company would be reporting a continuing nil balance to the CRAs each month, not that you are spending on it and settling it in full each month once your monthly statement is produced (and thereby positively evidencing your management of credit arrangements). Unless I've got the wrong end of the stick of course.

Notwithstanding that, however, it is good that you are clearing in full each month and not incurring any interest.