Credit Scoring

[scoobied]

Hi there - I'm a bit intrigued by the way agencies calculate credit scores in that I've never defaulted, always paid on time and no other potential black marks. I do have a loan which has two years to run and 2 credit cards but as I said all up to date. Now Noddle puts my score at 3/5 which seems average but equifax gives me an excellent score of 510. I realise the numbers mean nothing but how can I be excellent and average?

[matttye]

You said it yourself, the numbers mean nothing.

 

Each lender has their own criteria for "scoring" you or deciding whether to lend to you, just like each credit reference agency scores you differently.

[dx100uk]

are you on voters?

any late markers?

dx

[scoobied]

I'm on the electoral register and no late markers, no defaults, no ccj's nothing other than paid on time

[dx100uk]

very strange.

p'haps ask noddle?

 

there is a question asking area

 

dx

[BRIGADIER2JCS]

Hi there - I'm a bit intrigued by the way agencies calculate credit scores in that I've never defaulted, always paid on time and no other potential black marks. I do have a loan which has two years to run and 2 credit cards but as I said all up to date. Now Noddle puts my score at 3/5 which seems average but equifax gives me an excellent score of 510. I realise the numbers mean nothing but how can I be excellent and average?

 

 

Hi this is a question that I have answered many times so I'll try and explain the procedures and their effects.

1. Not all ''creditors'' rgeport to All the CRAs (Noddle is an example it is an off shoot of CallCredit and uses ''2nd hand data'' and is not all ways up to date.

2. The ''credit'' score is a mystica'' figure that the agencies work out for each data subject based on HOW THE AGENCY SEES a persons ability to get credit, it is intended as a day to day indication for the individual ONLY.

3. Prospective creditors ALL have individual and unique methods of assement of credit apps the ''credit score'' plays a tiny part in this, creditors will look at:

 

Residential records, (how long at one address) (on Electoral Roll?), ( many moves in a short time) (linked addresses)

 

4. Defaults.

 

5. Late payment markers.

 

6. Searches by creditors and DCAs.

 

7. Number of credit app being made, to many indicates ''credit hunger''

 

*. The credit scoring poor/fair/good/excellent must be viewed in contex good on one agencies assessment is excellent on anothers.

* To few accounts even if all good is as bad as too many accounts and a large percentage of ''availble credit'' being used.

* Having no ''settled'' accounts showing also will affect the ''score''.

*Having accounts that have short histories even if good do not give potential creditors enough data to make a reasoned assessment of one credit worthiness.

 

*The CRAS are aware of and also act upon the ''current financial climate'' where at present potential lenders are looking for far longer periods of good++ credit management often up to 5 years for such loans as mortgages.

 

Hope that helps.