New credit has lowered my credit score

msw18
msw18 Posts: 3 Newbie
in Credit file & ratings
Hello all


I have recently taken out car finance (of around £25,000) - I previously had car finance of around £7000.


Other than that I have no long-term debt and my only other short term debt amounts to £1,000.


Before I took out the car finance I had a "good" credit score, and now after taking out the finance it has dropped to the higher end of "poor". Will this right itself soon and is it only because its new and a hard credit check has just been done???


I have never missed a payment on anything and all my other points are good, on the electoral role etc etc :( any help would be appreciated.


Thank you

Comments

  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    First Anniversary Photogenic Name Dropper First Post
    The credit scores are made up and not related to your credit worthiness.

    Changes such as opening a card, closing a card, taking on debt, paying off debt, will all lower the score. Ignore it.

    Just be aware that lenders will factor in your new debt when assessing you for affordability in the future.
  • msw18
    msw18 Posts: 3 Newbie
    Ok thanks, so will it right itself in a few months?


    Just conscious that one month after the new credit it has gone from good to poor and this can be the only reason?
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    First Anniversary Photogenic Name Dropper First Post
    It may, or it may drop further. It's entirely meaningless.

    The only thing that matters is your credit history and how lenders interpret it.
  • msw18
    msw18 Posts: 3 Newbie
    So as long as I have made my repayments I'm ok?


    Thanks for your help
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    First Anniversary Photogenic Name Dropper First Post
    Ok for what? What are you looking to achieve? Is there a certain lender and product you want to apply for?
  • stehouk
    stehouk Posts: 412 Forumite
    First Anniversary First Post
    My credit score is up and down like a yoyo, it has been stable on moneysaving credit club but clearscore and noddle it is up and down, i ignore it anyway.
  • System
    System Posts: 178,093 Community Admin
    Photogenic Name Dropper First Post
    msw18 wrote: »
    So as long as I have made my repayments I'm ok?


    Thanks for your help

    Your credit score with the credit reference agencies is a made up number that no lender uses. The content of the file counts, not the makey uppey number they apply to it.

    If you are declined for credit in the future it is likely going to be due to the fact you have £25k on credit with the car finance so you fail affordability tests depending on your income and other credit you have.
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