credit score dropped

opstrat · 29 Jun 2013 at 22:01

hello.

I applied and was accepted for a credit card during the week and recently have been keeping a close eye on my credit history and rating.

i know that applying for credit and finance and even searching for things like car insurance can appear on your credit report but since my application and acceptance of the credit card my score has dropped 40 points. is that normal?

scorchisio · 29 Jun 2013 at 22:12

yes, applying for credit hurts your score every time you do it, whether your accepted or declined for it. I know this for fact as i work in finance and deal with equifax, experian etc on a daily basis.

jas72 · 29 Jun 2013 at 22:14

Why does this matter?

weringo · 29 Jun 2013 at 22:23

You've just received credit from a lender, this means you're higher risk to other lenders as your outgoings have potentially increased due to repayments on the new credit you've received. Hence your "credit score" has fallen.

Not sure why this isn't obvious.

Crowort · 29 Jun 2013 at 22:27

On the upside if you use your credit well it will go up again and likely to a higher level than before.

Glaucus · 29 Jun 2013 at 22:28

jas72 said:
Why does this matter?

As it shows you are looking for credit and could be applying for multiple lots.

aln · 29 Jun 2013 at 22:38

It's funny because if you were to do what would seem like the logical thing and apply for several forms of credit to see who comes back with the lowest rate, you'll only ever get a higher rate as its that you've applied for credit. >_<

Kishywish · 29 Jun 2013 at 23:03

Genuinely learnt something here.

Did not realise that applying for a credit card affects the rating in the short term.

Seems logical once it's been patiently explained to me.

NoodleKing · 30 Jun 2013 at 08:31

Another way to boost your credit score is to ensure you are registered on the voters roll.

Phreaky · 30 Jun 2013 at 08:52

The 'credit score' you get from online providers such as Experian is bogus anyway, the banks/insurers/etc use their own scoring methods.

drumunsta · 30 Jun 2013 at 08:57

wish my credit score only dropped 40 points. i moved house and it dropped 20o or so :-|

Camalot · 30 Jun 2013 at 10:19

I moved banks and moved house and my credit score is now crap.

Would how much debt you have affect your credit score?

NoodleKing · 30 Jun 2013 at 10:23

Phreaky said:
The 'credit score' you get from online providers such as Experian is bogus anyway, the banks/insurers/etc use their own scoring methods.

I wouldnt call it "bogus" .each financial institution choose which credit reference agency they wish to use,be it Experian, Equifax or D&B.

These agencies are there to provide a guideline to the credit provider who each have their own credit decision policies. Some may be more averse to risk than others and thus you may be rejected at one place,but accepted at another. The way the banks use their own scoring methods as you've mentioned is through drawing from the information given to them by the agencies, so it is still advantageous to ensure there are no "black marks" on your credit history as it will affect the decision of the bank.

Pawnless Endgame · 30 Jun 2013 at 11:11

NoodleKing said:
I wouldnt call it "bogus" .each financial institution choose which credit reference agency they wish to use,be it Experian, Equifax or D&B.

Yes. Think of it as clothes sizes. A 34" waist at Burton could be up or down by a size at other clothing shops.

utajoker · 30 Jun 2013 at 11:19

What do people use to check credit?

My fiancée used to use experian but eventually stopped and it was very difficult to cancel the payments. She had to stop the direct debit with the bank and then they put it as not paying and it lowered hers :/

Phreaky · 30 Jun 2013 at 11:31

NoodleKing said:
I wouldnt call it "bogus" .each financial institution choose which credit reference agency they wish to use,be it Experian, Equifax or D&B.

These agencies are there to provide a guideline to the credit provider who each have their own credit decision policies. Some may be more averse to risk than others and thus you may be rejected at one place,but accepted at another. The way the banks use their own scoring methods as you've mentioned is through drawing from the information given to them by the agencies, so it is still advantageous to ensure there are no "black marks" on your credit history as it will affect the decision of the bank.

Yes, but that isn't what I am saying - the score is bogus, the credit information itself obviously isn't otherwise they have no reason for existing. The score is just a number that the credit agencies have calculated themselves as an easier way to rank your own credit profile, its agency specific and isn't used by lenders in the credit scoring process.

Hades · 30 Jun 2013 at 11:45

Phreaky said:
The 'credit score' you get from online providers such as Experian is bogus anyway, the banks/insurers/etc use their own scoring methods.

They do take the credit score into account. But they do also take other factors into account such as a person's propensity to default on the loan, propensity to pay it back early, likelihood of taking the loan at a specific rate, likelihood you are of taking a competitors loan instead ( brand loyalty). Even if two people with the same credit score walk into the same bank branch and ask for a quote, they are likely to get slightly different APRs.

I wrote part of a banks loan quotation system.

ince · 30 Jun 2013 at 11:47

utajoker said:
What do people use to check credit?

My fiancée used to use experian but eventually stopped and it was very difficult to cancel the payments. She had to stop the direct debit with the bank and then they put it as not paying and it lowered hers :/

rubbish. a quick call to them and they will cancel.

ps the credit score from these providers is a waste of money.

pooley · 30 Jun 2013 at 11:48

utajoker said:
What do people use to check credit?

My fiancée used to use experian but eventually stopped and it was very difficult to cancel the payments. She had to stop the direct debit with the bank and then they put it as not paying and it lowered hers :/

I use Noddle, Heard about them from these forums..

https://www.noddle.co.uk/

Camalot · 30 Jun 2013 at 14:27

pooley said:
I use Noddle, Heard about them from these forums..

https://www.noddle.co.uk/

Another vote for noddle, currently score me 1/5 :eek: