Why does credit score go down when utilising your limit?

Olinda99

Desmond_Hume said:

Recommendations like… take out this product with us to improve your score..? Oh…

completely the opposite in fact!!

my last one said your credit score has fallen because you have taken out too many new products in the last six months. in order to increase it we recommend you don't apply for any more products for another six months (or something like that) 

Olinda99

born_again said:

Olinda99 said:

not used - not used by lenders maybe but it certainly is used (by my bank for example - they show it to me regularly with suggestions)

not consistent - maybe not across different agencies but certainly within any given credit agency it is consistent if only because they use an algorithm to produce it

gives the opposite to reality - not sure what you mean by this it's a number and therefore reality.

I'm not trying to argue for or against a given agency's credit score I just disagree with the dogma that it is completely useless and should be totally ignored

And AI agrees with me.

Yes Halifax show one, but it does not mean they use it to make lending decisions.

What is your definition then?

Meaningless as it is not used by lenders.

Yes I have said on a several occasions it is not used by lenders

It does have meaning though - to me - for example if my credit score with Transunion was 999 and the following month it dropped to 300 then I would have a look at what I was doing. In that sense it has meaning.

I suppose it is not the actual number that is important - as you say the number is just a made-up number depending on what algorithm the credit reference agency uses.  What I find interesting and meaningful are changes in the number.

th081

While the score is not seen by lenders who have access to the underlying data and apply their own algorithm it is still useful. It gives you a indication of how the CRAs see you and while not the same as lenders it will be similar. For example 2 people with 10 years credit history one with a record of paying back the other with missed payments, the CRA would score the second lower and would lenders.