Credit Scoring

[bathgatebuyer]

My own credit score is 455 which lists me as 'very poor'. Is it likely to change at any point in the future? I mean, how long would it take to return to the land of the financially acceptable as opposed to being the leper I am now!?

 

While we get points against us for missing payments, etc, do we gain them by making payments within the timescale? When an account is settled, do we gain points? It seems unreasonable that we have this score like a noose around our necks when the cuase of the financial problems are often not of our choosing, i.e. unemployment, divorce, illness, etc.

 

Would be great if someone who used to work for Experian was around here and feeling helpful!

[LondonPam]

The credit score that you have been given is actually quite a new "feature" to the UK. It is available from one of the credit reference agencies and is calculated on their data in a similar manner to how the USA does theirs. In the USA each person has a credit score and only one credit score. They use this for loans etc However here in the UK we do NOT use that system. Each bank/company calculates their own score allocating however many points they like to each part of your details. So for bank a you may have a score of 200 and for bank b 800. The score is completely independant to each company.

I've worked in credit scoring for many years and by far the best way to improve things is to pay on time every time. What lenders look for are consistent payments, paid on time and within your limits. Check your report and try and make sure that you have a nice line of zeroes against each entry for at least six months. A couple of 1's or 2's should be ok spread over a period of time. Check and make sure that all the details on the report are correct and correct any that aren't.

I think I saw you post about remortgaging. If you have paid every month for a while now it can sometimes help your application if you supply the company with a statement showing your payments.

 

Hope I've explained it ok.

[bathgatebuyer]

It has - thanks! The problem I found myself in was that I've been paying so much monthly to remove up my arrears following my period of unemployment that I'm left with a minus figure every month. In the time that I've been back working, there have been 1's showing on my record and that nasty 4 from Cahoot (who spent ages dallying with their PPI before deciding I wasn't getting any!) which was returned to a nice '0' within 3 months (so, I was paying about £400 a month back in Cahoot loans on top of my £900 in mortgage, my £500 in car and my £200 in council tax arrears). Despite having a 4 weekly income of £1600, I was able to find £2K per month to get back on an even keel (so thanks Mr Halifax for giving me back my reclaimed charges!). I've literally been on bread and water for 8 months to get back to where I am.

 

Unfortunately, I can't shout loudly enough about that to the computer that makes decisions as to my credit worthiness, but I have been told that I can state my case to an underwriter. Hopefully the comparison of my budget A "As it is now" and Budget B "What it could be" will allow them to see this as a good opportunity for both of us, despite the initial reaction of their computer programme!

 

Thanks for your answer - credit scoring seems to perplex so many of us!

[Stornoway]

The credit score that you have been given is actually quite a new "feature" to the UK. It is available from one of the credit reference agencies and is calculated on their data in a similar manner to how the USA does theirs. In the USA each person has a credit score and only one credit score. They use this for loans etc However here in the UK we do NOT use that system. Each bank/company calculates their own score allocating however many points they like to each part of your details. So for bank a you may have a score of 200 and for bank b 800. The score is completely independant to each company.

I've worked in credit scoring for many years and by far the best way to improve things is to pay on time every time. What lenders look for are consistent payments, paid on time and within your limits. Check your report and try and make sure that you have a nice line of zeroes against each entry for at least six months. A couple of 1's or 2's should be ok spread over a period of time. Check and make sure that all the details on the report are correct and correct any that aren't.

I think I saw you post about remortgaging. If you have paid every month for a while now it can sometimes help your application if you supply the company with a statement showing your payments.

 

Hope I've explained it ok.

Pam

 

How much of an impact does length of time with employer and length of time at address in the overall score ?

[Guest NATTIE]

length of time at an address would have an effect on credit score, as you would be on the electoral role, one aspect of credit scoring. A tiny aspect but still one aspect of it

[gizmo111]

Also I beleive and I don't know if Nattie can clarify this - a bank wil lahve it's internal rating on you as a customer because they see your ingoings and outgoings and conduct of account.

[LondonPam]

Most banks do have an internal rating it's called a behavioural score. It reflects how you have operated your accounts with them, how much you pay in, those sort of details. It is sometimes used when you request a new product from the company and can be used to give you extra "points".

As Nattie says, time at your address tends to effect your credit rating more so than time with employert. The scoring systems I've worked on always gave more points for your address than they did for your job. Credit scoring is a bit of a minefield as you have no idea what the company are looking for.