Credit rating

LadyPickles

Hello, my credit rating has gone down recently. I have not missed a payment or done anything wrong. We have recently relocated and moved, we sold our house and paid off our mortgage. We are now in a rented property while looking for another house to buy. My borrowing as therefore significantly reduced. We are now on the electoral roll though this took some time to do. One or two of my credit accounts has made changes which shows as something removed them added. There have been no missed payments in over six years. Taking everything I’ve said into account, is it normal for credit rating to go down? Any advice would be appreciated. Many thanks 

Roundhillbob

Hi LP,
First, if you haven’t already done so, read Martin’s piece on credit ratings: in short: the are of very little use or relevance.
Second, they are incompetent and/or don’t care whether they have accurate information. We also recently moved.
Our flat has three possible addresses: 16a, 16/2 and 16 Flat 2.
We bought it as the second, most organisations’ dropdown lists have it as the first, but the Electoral Registration Officer has it as the third.
The credit rating agencies, including the one originally provided by Moneysaving Expert, have neither the ability nor the intelligence - or can’t be bothered- to resolve this.
Ignore them. They are a waste of space.
R

CliveOfIndia

Your credit rating/score as seen on your CRA reports usually goes down in response to any change in circumstances - whether good, bad or indifferent.  As per the previous poster, you can safely ignore 99% of the meaningless twaddle that's spouted by the CRAs - after all, they're not the ones lending you money.

A lender will look purely at the factual data contained in your credit file, run it through their own internal algorithms, and make up their own mind whether or not they want to lend to you.

LadyPickles said:

Any advice would be appreciated. 

The best advice is to ignore what the CRAs think of you.  It's important to check that the data they hold is factually correct, but aside from that you can largely ignore them.  If you suddenly see a large movement in your score, then it's worth checking to make sure there's nothing awry on your files (someone taking out a loan in your name, a default being erroneously reported, that kind of thing).  But that's about the only useful purpose their score serves - in and of itself, it's meaningless, and is not even seen by lenders.

adindas

I have one credit card that is only used to generate a direct debit. Therefore, I intend to reduce the limit, possibly as low as £100. However, I also have others with a high credit limit.I wonder what the impact of reducing the credit limit on one or two credit cards is on your creditworthiness, especially if you still have other credit cards with a high credit limit.

Nasqueron

adindas said:

I have one credit card that is only used to generate a direct debit. Therefore, I intend to reduce the limit, possibly as low as £100. However, I also have others with a high credit limit.I wonder what the impact of reducing the credit limit on one or two credit cards is on your creditworthiness, especially if you still have other credit cards with a high credit limit.

Reducing the limit as to essentially be unusable is not a great idea, it increases your debt/available credit ratio, other lenders seeing it don't see that you did it and might think another lender shut it down due to you being a risk. If you have multiple cards (including Visa and MC and Amex) then you could shut it down rather than leaving it with £100 but it's more sensible to just leave it alone and keep spending on it periodically as it maintains your credit history