Experian

[humpbackmaniac]

I have just been declined for a credit card change due to "bad" report on Experian, last time I checked I was 990 out of a possible 1000 points so I was a little concerned and paid again to view my status.

Now at 578 out of the same 1000 due to large debts, but zero ever defaulted or overdue. Yes I have Xk in loans but earn X x 6 plus so why am I tarred with a bad debt risk brush when I have never defaulted? Bastids. My borrowings to earning ratio does not apear to be an aspect of the report when surely that is the most crucial.

Have I become a victim of the Crunch?

[Jasandjules]

I would imagine so. Also, if you have got credit recently (i.e. just bought a large TV on credit or something) then that can affect your credit rating as I understand it.

Simply having lots of green dots doesn't make you a good credit risk (that's what they told me, in fact, I was told I was better off missing a couple of payments, then making good those payments, as that would make me a better risk that someone who has never defaulted)

[Zod]

I checked mine last week and found the same. I had declined from excellent to fair on the basis of "several large balances" which were intra-month balances on charge cards! They were also balances, which while large to somebody on £20k are immaterial to me.

It's clearly a stupid overreaction to the economic situation: anybody with debts of over £10k is a credit risk.

[monthefish]

Jasandjules said:

I would imagine so. Also, if you have got credit recently (i.e. just bought a large TV on credit or something) then that can affect your credit rating as I understand it.

Simply having lots of green dots doesn't make you a good credit risk (that's what they told me, in fact, I was told I was better off missing a couple of payments, then making good those payments, as that would make me a better risk that someone who has never defaulted)

How does that work then?

[playerone]

They are putting more and more data on there. Late payments and large credit limits, even if you havent used them, are also judged more harshly. Lenders also seem to be looking at the number of credit searches performed on you more closely.

The CRA's are just responding to what their large customers want.

[playerone]

Jasandjules said:

Simply having lots of green dots doesn't make you a good credit risk (that's what they told me, in fact, I was told I was better off missing a couple of payments, then making good those payments, as that would make me a better risk that someone who has never defaulted)

Who ever told you that isnt very clever.

Most underwriting is automated these days so its just looking for different flags. If you have missed payments, CCJ's or arent on the electoral role then you wont get past the first step with most (mainstream) lenders.

[humpbackmaniac]

Zod said:

I checked mine last week and found the same. I had declined from excellent to fair on the basis of "several large balances" which were intra-month balances on charge cards! They were also balances, which while large to somebody on £20k are immaterial to me.

It's clearly a stupid overreaction to the economic situation: anybody with debts of over £10k is a credit risk.

This was exactly my situation I dont want to put figures on here or start a "look at my massive P60" but my balances are the same, large for a shop stacker/ student but as Director of a FTSE100 company not huge to me and by no means a concern. If they looked closely they would see that all are at 0% balance transfer rates and are infact a wise way to hold monies owed.
Surely there is a flaw in the system here that affordability is not taken into account. Or is a link to HMRC the point in question with these Peers at present?

[Jasandjules]

playerone said:

Jasandjules said:

Simply having lots of green dots doesn't make you a good credit risk (that's what they told me, in fact, I was told I was better off missing a couple of payments, then making good those payments, as that would make me a better risk that someone who has never defaulted)

Who ever told you that isnt very clever.

Most underwriting is automated these days so its just looking for different flags. If you have missed payments, CCJ's or arent on the electoral role then you wont get past the first step with most (mainstream) lenders.

It was a person from Experian. The basic premise as explained to me was that someone who has lots of credit but never defaulted can get loads more credit, then default on all of them and go bankrupt. Someone who missed a couple of payments, but then gets back on track and continues the payments doesn't tend to go bankrupt and is therefore a better risk to lend more to.

It annoyed me at the time because with a perfect credit history I was refused a loan to get a nicer car.

[paulmurr]

humpbackmaniac said:

Surely there is a flaw in the system here that affordability is not taken into account.

Shirley that was the issue in the first place, where it was so easy to obtain credit that thousands of loans were dished out when the loaners had no chance of making the repayments. Now the banks have st a brick they've gone the other way and wont lend unless you're squeaky clean. A happy medium between these positions would have meant that the crunchy credit situation would never have arisen in the first place.

[fatboy b]

I was also told that multiple credit cards can be to blame too. I had a card declined because the cummulative credit limits already available to me (even though I wasn't using some cards at all and had a zero balance) was deemded to be my personal limit. If I wanted to get a 0% card, I had to close a few down.