Preapproved for credit card-being considered?
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Again it isn't that simple. Most lenders *do* use a scoring model internally. Granted, it won't be identical to the ones consumer credit report sites use, but the basic inputs and weighting are quite similar. Improve your score on the consumer credit report sites and you'll improve your internal scoring with most lenders.
The scores aren't meaningless like so many on here like to claim. They're based on similar models to what lenders use and thus give you a good general idea where you stand.0 -
Again it isn't that simple. Most lenders *do* use a scoring model internally. Granted, it won't be identical to the ones consumer credit report sites use, but the basic inputs and weighting are quite similar. Improve your score on the consumer credit report sites and you'll improve your internal scoring with most lenders.
The scores aren't meaningless like so many on here like to claim. They're based on similar models to what lenders use and thus give you a good general idea where you stand.
Given that you can be rejected by one lender and accepted by another based on identical data, we can be certain that the weightings are not quite similar.
Unless you have access to the lending algorithms for most lenders to confirm your assertion?0 -
What's on your credit report ?
Any negs ?
Rejections aren't on your report, just the search.
Nothing really negative-the only negative is saying I don't have a credit card! I have two credit store accounts in good standing with low balances. Had them 7 years. So I do have a history of good borrowing, no defaults etc
I'm wondering if the likely cause is that I recently (successfully) switched banks. This was a hard search, but it wasn't for credit?0 -
Again it isn't that simple. Most lenders *do* use a scoring model internally. Granted, it won't be identical to the ones consumer credit report sites use, but the basic inputs and weighting are quite similar. Improve your score on the consumer credit report sites and you'll improve your internal scoring with most lenders.
The scores aren't meaningless like so many on here like to claim. They're based on similar models to what lenders use and thus give you a good general idea where you stand.
OK, so please explain why the CRA will lower your score in response to any change in your credit situation ? Win the lottery, pay off your mortgage - hey presto, your score drops.
Yes of course, all lenders have their own internal - and confidential - algorithms that will generate an internal score based on your credit history. This will have little if anything to do with the score made up by the CRAs. Quite apart from anything else, each lender will have a preferred target customer base. You could be very frugal with money, have never defaulted on anything, have £1000 stashed away in a savings account, and manage very nicely day-to-day on your average salary. But I bet Coutts wouldn't be interested in offering you a product.
You could be up to your eyeballs in debt and living off credit, barely having enough to buy a loaf of bread each week. Many of the mainstream lenders would refuse to lend to you, whereas the like of Wonga etc. will be happy to lend you more.
The point being, every lender has their own, very different, criteria. So the score made up by the CRAs cannot possibly be representative of anything.0 -
If there are any differences on the eligibility checker online form and the application form you submit to the credit provider then this would result in an application being referred.0
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Again it isn't that simple. Most lenders *do* use a scoring model internally. Granted, it won't be identical to the ones consumer credit report sites use, but the basic inputs and weighting are quite similar. Improve your score on the consumer credit report sites and you'll improve your internal scoring with most lenders.
The scores aren't meaningless like so many on here like to claim. They're based on similar models to what lenders use and thus give you a good general idea where you stand.
You're correct - lenders do use their own internal scoring system, but this is in no way linked or related to the mythical marketing number you see on your reports.
They don't give an indication on how good or bad you are - you could clear a debt or default of a few thousand pounds, closing the account, and your score would plummet, despite clearing the debt.
Explain that0 -
BorisThomson wrote: »Given that you can be rejected by one lender and accepted by another based on identical data, we can be certain that the weightings are not quite similar.
Unless you have access to the lending algorithms for most lenders to confirm your assertion?
Similarity isn't equality. I didn't begin to claim they were equal, merely that over a large enough statistical dataset, the models being sold to consumers do, generally, mean something in regards to being *similar* to how most lenders will score your credit report. In some cases, it actually might be identical (if the lender buys the score as-is, though this is less common in the UK than in some other countries).
But remember, lenders are scoring your *application* not only on their score of your credit report but on other factors as well, which may include but definitely aren't limited to:
- Length of employment
- Income
- Stability of employment (thus why they ask if you expect any reduction in income)
- Cost of your housing
- Anything they perceive as a risk factor they can legally consider (remember some protected characteristics would be unlawful discrimination to consider)
- Potential profitability
The last one is *huge* and might be very different from how you expect. Some lenders are known to consider excellent scoring credit files as a negative on potential profitability... they are fee-chasing, and you're less likely to pay fees!
Changes, even seemingly good changes, indicate instability and are likely to result in short-term drops in how a credit file is scored, so that seems pretty accurate to me.
I'm not saying you should treat consumer credit scores as gospel. But I also think it's dangerous to say 'oh, it's not identical to what lenders use, so you should just ignore it'. Be sensible, treat your credit well, PIF before any interest charges, etc and I think you'll generally find both your consumer scoring and internal scoring will go up (but some banks will reject you for that!).0 -
if the lender buys the score as-is, though this is less common in the UK than in some other countries.
With the greatest respect, you do seem to be missing the point here. Lenders DO NOT and CANNOT see the score that is made up by the reference agencies ( and they certainly don't "buy" it ).
Certainly they will pay the CRAs to get a report of your financial history. Certainly they will feed that information into their own internal algorithms, and decide whether they wish to lend to you or not.
By your own admission : "PIF [ I assume that means "Pay In Full" ? ] before any interest charges, etc and I think you'll generally find both your consumer scoring and internal scoring will go up (but some banks will reject you for that!). "
As I said before, lenders make their own mind up. They have different acceptance criteria. Distilled down to the absolute basics ... some lenders prefer to make a small but regular profit by lending to people who are pretty much guaranteed to pay back, and who pay a little bit of interest now and then. Oh, and not forgetting that for credit cards, the card company receives a payment from the merchant for each transaction. Others make a large profit by lending to people who carry a balance month-to-month, they make a shed-load of interest but the borrower may well not pay back, so the lender then has to suffer all the associated court costs etc. That's their preferred business model, and that's the risk they take.
The bottom line is - the score provided by the CRAs is totally meaningless. What IS important - if you want to access credit at a competitive rate - is to build up a solid history of responsible borrowing and repayment, and also to check that the information held by the CRAs is factually correct. No more, no less.0 -
Ebe_Scrooge wrote: »With the greatest respect, you do seem to be missing the point here. Lenders DO NOT and CANNOT see the score that is made up by the reference agencies ( and they certainly don't "buy" it ).
Lenders can buy in a score. It's not common but it is possible.
More likely to be very small companies like letting agents, rather than big banks.
But the point being made is still valid - the score the CRA shows you is not absolute nonsense. It uses an algorithm which is similar to those used by banks. Not the same, but similar.0 -
Ebe_Scrooge wrote: »You could be very frugal with money, have never defaulted on anything, have £1000 stashed away in a savings account, and manage very nicely day-to-day on your average salary. But I bet Coutts wouldn't be interested in offering you a product.
What, even if they have a "perfect" 999 score which they have printed and framed in their living room? Surely some mistake!0
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