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What your credit score really means

edited 9 January 2019 at 2:57PM in Credit File & Ratings
394 replies 211.6K views
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  • I think a lot of the confusion is because how credit "score" and credit "rating" get interchanged so frequently. Compound that with the U.S. credit system and things can get confusing for some.

    I think this sums it up fairly well:
    "Your credit score
    The three credit reference agencies, Experian, TransUnion and Equifax, have individual ways of scoring you, meaning the numbers you see may be different for each one.

    Interestingly, lenders don't see this score at all - it's just for you. The score you see reflects what's actually in your file, which is what lenders will look through when you apply for a credit product."

    source: moneysavingexpert (dot) com/loans/credit-rating-credit-score

    Credit scores are BS in the UK (as far as lenders are concerned).
  • boo_starboo_star Forumite
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    I think a lot of the confusion is because how credit "score" and credit "rating" get interchanged so frequently. Compound that with the U.S. credit system and things can get confusing for some.

    I think this sums it up fairly well:
    "Your credit score
    The three credit reference agencies, Experian, TransUnion and Equifax, have individual ways of scoring you, meaning the numbers you see may be different for each one.

    Interestingly, lenders don't see this score at all - it's just for you. The score you see reflects what's actually in your file, which is what lenders will look through when you apply for a credit product."

    source: moneysavingexpert (dot) com/loans/credit-rating-credit-score

    Credit scores are BS in the UK (as far as lenders are concerned).

    With all due respect you're just saying what the regulars on here have been saying for years.
  • [Deleted User][Deleted User]
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    MoneySaving Newbie
    I think a lot of the confusion is because how credit "score" and credit "rating" get interchanged so frequently. Compound that with the U.S. credit system and things can get confusing for some.

    I think this sums it up fairly well:
    "Your credit score
    The three credit reference agencies, Experian, TransUnion and Equifax, have individual ways of scoring you, meaning the numbers you see may be different for each one.

    Interestingly, lenders don't see this score at all - it's just for you. The score you see reflects what's actually in your file, which is what lenders will look through when you apply for a credit product."

    source: moneysavingexpert (dot) com/loans/credit-rating-credit-score

    Credit scores are BS in the UK (as far as lenders are concerned).

    Thanks for coming by and copy/pasting the MSE article :money:
  • IvanDPIvanDP Forumite
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    Thoroughly enjoyed reading this thread, and thought I may as well add my experience.
    :T:T:T

    I have never really taken much notice of credit scores, but I am signed up to Credit Club, purely for the purpose of being able to see my credit file without having to pay for it.

    I can confer what the more experienced posters on here have said about ignoring these scores and some of the so called advice that the likes of Clearscore, etc give you to "improve your score"

    A little background:

    I live in rented accommodation (tenancy in my partners name, not mine)
    I am not on the electoral register (personal choice)
    Car on PCP (£10,000 - £7,500 still outstanding)
    2 credit cards with £15,000 total credit limit (although always paid in full)
    Approximately £1500 paypal credit
    (used to purchase items we planned to buy anyway and 0%APR)
    Mobile phone contract
    Broadband contract
    2 current accounts (Nationwide and Starling) with combined £500 overdraft

    According to the so called credit scores, I was pretty unlikely to be able to obtain further credit.

    Yet...........
    In the last 6 months, I have applied for and got:
    American Express preferred rewards gold credit card
    Tandem cashback credit card
    Monzo current account with £300 overdraft
    Nat West current account with £200 overdraft (opened as a donor account for switch bonus)
    Club Lloyds current account with £300 overdraft (for £125 switching bonus)
    Nationwide FlexDirect account with £300 overdraft (only for the 5% interest)
    Traded in the car for a brand new one on new PCP

    So believe me, if you are not in a huge amount of debt, take the advice of the more experienced members of this forum and totally ignore whatever your so called "credit score" says.
  • Hi,

    I have a couple of payday loans currently in a complaint stage for irresponsible lending and now the companies (wonga, moneyshop, quickquid) are going into administration.

    Irresponsible lent loans can be wiped from a credit score. Is this still possible when a company goes into admin and shuts down? if so does anyone know how i do this?

    thanks
  • Important update! We have recently reviewed and updated our Forum Rules and FAQs. Please take the time to familiarise yourself with the latest version.
  • DCFC79DCFC79 Forumite
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    noel1994 wrote: »
    Hi,

    I have a couple of payday loans currently in a complaint stage for irresponsible lending and now the companies (wonga, moneyshop, quickquid) are going into administration.

    Irresponsible lent loans can be wiped from a credit score. Is this still possible when a company goes into admin and shuts down? if so does anyone know how i do this?

    thanks

    Credit history you mean right ?
  • zx81zx81 Forumite
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    You're after it being removed from your files. If you have agreement from those companies that the loans were mis sold and would be removed send that to the CRAs and ask them to remove them.
  • I've made a large payment on my credit card and now my Experian credit score has dropped over 100 points...even though I've paid off the full balance in plenty of time! Never had a late payment on my credit card so I'm really surprised that my score has dropped from the upper 900s to the 700s, will it just sort itself out and go back up to the same level when it recognises that I have paid off the balance? We'll be looking at mortgages for our first house soon so this has got me slightly worried!
  • zx81zx81 Forumite
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    Your score reacts negatively to any change, whether taking on new debt or paying it off.

    That's why you just need to ignore it. It's not a reflection of your credit worthiness and not used by lenders.
  • DCFC79DCFC79 Forumite
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    Wrighj92 wrote: »
    I've made a large payment on my credit card and now my Experian credit score has dropped over 100 points...even though I've paid off the full balance in plenty of time! Never had a late payment on my credit card so I'm really surprised that my score has dropped from the upper 900s to the 700s, will it just sort itself out and go back up to the same level when it recognises that I have paid off the balance? We'll be looking at mortgages for our first house soon so this has got me slightly worried!

    You have nothing to worry, make a cuppa, sit down and be safe on the knowledge your score isn't seen by anyone but you.
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