Credit score

Daddyele

Hi.

I opened a new Plum account, set up a direct debit on my linked account and realized my credit score dropped.

Please what could have happened and why is my score going down for opening a plum account and setting up direct debit?

DE_612183

credit scores mean nothing

you now have a new account, and therefore in the eyes of the credit scorer are riskier so they deduct you points.

the only thing that matters is how a potential lender in the future views your credit worthiness based of your credit accounys

Ayr_Rage

@Daddyele please watch the MLMS "credit score" edition on ITVx

CliveOfIndia

The credit score that's dished out by the CRAs will drop in response to any change in your financial circumstances - whether good, bad or indifferent.

The good news is that it not used - nor even seen - by any prospective lender, so it matters not one jot whether it's 1 or 1000.

The only possible use it has is to alert you to changes.  If you suddenly see a big drop for no apparent reason (or at least, no reason you're aware of), then certainly check your file to make sure nothing untoward is going on (someone fraudulently taking out credit in your name, for example).

But that's about the only purpose it serves - as I say, it's not even visible to lenders.  They simply analyse the raw data contained in your file and make their own judgement, based upon their own individual lending criteria (which can vary quite substantially from one lender to another).