Score dropped after recommended credit usage

Otuama

Hi all,

I'm pretty confused.

I've had a credit card for a few years but have only just started using it in the last 2-3 months.

It has a limit of £1k.

I use it for most things and pay it off gradually throughout the month.

I started using it to improve my score.

Near the end of the month I make sure I have £100 on it - so 10% of my credit utilisation ratio.

I have a very good score on all 3 credit companies - Experian for example is.... or was until today 983.  It's been this for about a year.

I was expecting it to rise but instead it's gone down to 968.

Not a happy bunny.

Does anyone know why this would be?  Maybe I'm misunderstanding something.

One thing I am thinking is..... am I being a moron?

1. At the end of the month I make sure I have £100 showing for the credit agencies..... Maybe I'm sorting this too late - does anyone know what date Barclaycard send this info?
2. So, when the month rolls over, I still have £100 in there - I essentially always have 100 in there.  Should I be paying off this £100?

• I have a DD for the full amount set up but even though I have just over £100 used on the card, the DD is saying it will be collecting £0.

If anyone can help with all this that'd be great.

Thanks

Peter999_2

The credit score is just a made up figure by the credit reference agencies.    No lender gets to see your credit score and they follow their own rules as to whether they will loan you money.   You could have a "score" of 999 but earn £14,000 a year and struggle to get anyone to lend you money.    

elsien

What financial institutions are interested in is your credit history and your affordability. So basically responsible use of your credit card and no late payments, not overstretched with other loans, no multitude of recent credit applications etc. 
I’m not sure why you’re leaving £100 on it, which you are likely to be paying interest on, when paying it off in full every month equally shows a responsible use of credit. 

Dobbibill

Hi - Welcome to the forum.

You have misunderstood the score. As above it's pretty useless.

The only thing Experian should be used for with the score is if it dramatically drops to say 150, then check for fraudulent accounts opened in your name. Aside from that their score is as much use to you with lending as a score I may give you.
Neither I nor Experian provide lending, therefore our opinions are pointless. 

Continue to pay off your CC in full and on time every month. This is demonstrating good behaviour with current lending facilities you have, future lenders will look at your 'history' not your 'score'.

Martin_the_Unjust

I’m not entirely convinced that paying it off in cribs and dabs through the month and then leaving £100 on it is actually demonstrating responsible credit worthiness.

Ayr_Rage

Leaving a running balance is daft and the made-up score probably reflects that as it indicates that you are not paying it off in full every month.

If you spend 10% of your available credit and clear it every time it'll look better not doing so and paying interest.

The various CRAs may treat your usage differently, so don't rely on their numbers for anything, check the report details.

kimwp

Credit score aside, I am not sure why you are paying it off through the month and why you are leaving £100 on it at the end of the month?

As you spend, the spends will get added to your account. At a certain point each month, everything on the account will get added to a statement/bill, which you will be asked to pay by a certain date. After this point, anything you pay into the account will go to paying off this bill. This will reduce the DD that is taken - which is why it is saying that the DD will take nothing.

You don't need to make sure there is a certain minimum percentage of utilisation, really, the lower it is, the better.

Set up a direct debit to pay the full amount (on the statement) off, make sure this amount is available in your current account at that time and that's all you need to do.