What your credit score really means
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CREDIT SCORE SWINGING UNCHARACTERISTICALLY?
To clarify my query, I'm confused as to why my credit report has swung from a steady "Fair' rating to "Good', back to Fair' and now to 'Poor' all within 6 months with little change in my spending/payment behaviour, only a utilities switch, bank account switch and a new card. Any helpful insights welcome, thanks!
Hi,
You can drive yourself nuts keeping tabs on your fictional credit score, i really would stop looking at your credit file every 5 mins, the score is generated by the credit reference agency, a while back some bright spark figured out that some (gullible) people may pay money to "improve" that score, low and behold credit improvement products were born, the main purpose of your credit score is basically to sell you something you do not need.
CRA`s are not lenders, so it matters not a squat how they may rate you, lenders have their own credit scoring process they use when making lending decisions, its good credit history that counts, paying your bills on time, no late payments, no defaults, been registered on the electoral role at your current address, all good common sense stuff, so ignore the score, concentrate on the history.I’m a Forum Ambassador and I support the Forum Team on the Debt free wannabe, Credit file and ratings, and Bankruptcy and living with it boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.For free non-judgemental debt advice, contact either Stepchange, National Debtline, or CitizensAdviceBureaux.Link to SOA Calculator- https://www.stoozing.com/soa.php The "provit letter" is here-https://forums.moneysavingexpert.com/discussion/2607247/letter-when-you-know-nothing-about-about-the-debt-aka-prove-it-letter0 -
You seem to have done three things that would be expected to reduce a credit score:a utilities switch, bank account switch and a new card.
1. reduced the length of time for which your longest credit accounts have been active, reducing your apparent stability. Bank account and utility switch. Probably the longest duration effect.
2. three new credit account applications. Bank account, utility and card. Likely to reduce to low effect after three to six months and none after a year.
3. more credit available and maybe more used. A long term effect, gradually reducing if there are no issues with payments.
Your score is likely to drift back up over the next year or so.
A credit rating is something to use. You used it, it did what it was expected to do, nothing to worry about unless you expect to apply for a mortgage soon.
My own scores are normally poor. No surprise when I often have 80% credit utilisation over quite a few cards.This doesn't prevent me from getting regular limit increases from the cards, in part because I don't make late payments. For stoozing in my case, using my credit record to make me money via the borrowing.0 -
hi please can someone offer some advice before I humiliate myself! Hubby works in a garage and we need to look at replacing my old/expensive to maintain vehicle. He's been offered a great staff PCP on a car but 5 years ago financially things were tough with the birth of our twins and is affected our ability to pay the full amount to them all so entered into an agreement with Stepchange. Now, we are both working full time, no childcare costs etc and money is ok but my Experian rating is 725, which they deem 'fair'. Hubby has recently joined this company and I don't want the humiliation of being turned down. Does anyone know if a Experian of 725 is acceptable for passing? Parents will happily guarantor for me and I know when I went to the Halifax for a house insurance quote they viewed my credit rating as very good. There are soo many now I am very confused.0
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Kirkie1980 wrote: »Does anyone know if a Experian of 725 is acceptable for passing?
Acceptable to pass what, a test at school ? Who knows
Acceptable for being offered a loan, well it depends on many factors.Kirkie1980 wrote: »Parents will happily guarantor for me and I know when I went to the Halifax for a house insurance quote they viewed my credit rating as very good. There are soo many now I am very confused.
That's funny as lenders don't see your score, just your report, you should ask what your score was, maybe they referred to the internal score Halifax use.0 -
You and your husband have your own credit records and scores and the way a score is calculated depends on the purpose for which an actual provider of a service is doing it and their own policies. The generic scores can be useful indications, particularly for trends, but they aren't perfect and don't take everything into account.Kirkie1980 wrote: »my Experian rating is 725, which they deem 'fair'. Hubby has recently joined this company and I don't want the humiliation of being turned down. Does anyone know if a Experian of 725 is acceptable for passing? ... when I went to the Halifax for a house insurance quote they viewed my credit rating as very good.
PCP is likely to be a good choice for a less than ideal credit record.
The average Experian score is a bit above 760 out of 999 and prime is anything over 680. If your husband has a score similar to yours he should be fine. Your score is pretty normal.
I've been routinely receiving credit card limit increases for years with Experian scores in the "poor" range (561-720) in part because of a perfect on time payment record even with around 80% use of my limits. For stoozing in my case. The problems you had were more of a potential problem but some time has passed and he should be fine.0 -
The score is entirely made up and is to be ignored.
There is no such average rating or score, and it is zero indication to anything.0 -
Every claim you just made is untrue. Please don't seek to mislead people like that.The score is entirely made up and is to be ignored.
There is no such average rating or score, and it is zero indication to anything.
The most obvious is your claim that there's no average score, which is untrue as soon as the first person has a score calculated because that's enough for an average score to be calculated. That's basic secondary school maths.
There are plenty of limitations and flaws in the generic scores but they aren't worthless.0 -
I’m aware how maths works.
But the CRA scores are entirely made up.
People who are bankrupt get a 999 score.
People with a 999 score can’t get a £20 or less SIM only phone contract.
Worthless made up numbers.0 -
There are plenty of limitations, including not using income and not having all information immediately but limitations don't mean that the numbers are random ad you appear to be trying to suggest. Anyone who's tempted to believe you only has to go as far as he MSE guide.0
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There has to be an average score, albeit an average made up score. If Experian give everyone a score then there has to be an average. That said the score, average or not is meaningless.0
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