Do I understand credit scoring?

[Jimmy Recard]

Right, I've been doing some research for a few days as I'm hoping to take out a large loan towards the end of the year so I want to make sure everything is right.

I signed up to Experian and checked my credit score. I've lost marks for not being on the electoral roll. I am definitely on the roll as I voted with this address last year.

I've also lost marks for a dispute I have with one bank (with which I've never had any product) as someone used my details to open an account and then took it to the overdraft limit last year. That bank acknowledges this and promises to remove it from future checks (I don't know how quickly it will happen though)

Any ideas how I can change the electoral roll thing or sort out the fraud thing for credit checks?

A tip Experian gives (and a friend backed this up, but he's no expert) that if you have higher credit limits, it can look better for your scoring (as long as you're well within the limits, of course)

I had two credit cards with low limits of £250 and £750 each. It never occurred to me that more would be beneficial. The £750 card hasn't been used for months and the £250 card had a total of £21.53 on it.
They're both with major high street financial houses. I logged into my account and applied for the £250 card to be lifted to £2000. This was granted automatically.

Is this indeed beneficial? I might as well get them as high as possible in case I need them, but will it really help?

I'm trying to do everything to maintain my good score as I don't want to be rejected for credit later this year!

Any other tips?

[eliot]

My score was 999 - yet my bank still offered me a lousy interest rate on a loan. So whilst it's a factor, the dont nesesarily pay any attention to the likes of experian et-al

[Nickyboy]

Jimmy Recard said:

Is this indeed beneficial? I might as well get them as high as possible in case I need them, but will it really help?

In theory yes, when i lowered the credit limits of my cards my score plummeted. Now it seems if i have a high limit but low balance it scores well.

No real tips, you seem to have your finances under control, just make sure the negative marks are gone asap as they'll be visible for 6 months

[Pheo]

Each individual lender has their own scoring methodology depending on the type of risk they want to take on. So these experian things are only illustrative. Get a free one from Noddle if you must.

To sort the fraud piece out make sure it's registered with CIFAS and then contact the credit reference agencies to put a notice of correction / note against it. This will cause lenders credit referencing process to route t manual review so shouldn't impact you too much.

[WolfAir]

I am with Noddle credit check myself, a free service. Experian are in noway worth the £15 they charge a month. Other than that, I have found if I buy something on my credit card and then pay the minimum amount so they next month they charge me interest, my credit score has gone up.
That said, I myself got a lousy quote for a loan from my bank... and I'm supposed to have superb credit.

[Jimmy Recard]

I also signed up to Noddle and I got pretty much exactly the same information. I'm just using the 30 day free trial on Experian and I've received £5.25 through Top Cashback for doing it!

The negative points - I'm not quite sure what to do. Can I rejoin the electoral roll?
I presume that's an oversight by Experian.

The other one...all I can do is pester the bank and ask them what's happening with the process.

Thanks for the confirmation. I know that Experian etc aren't everything, but it's reassuring to have some outside guidelines. I suppose I just need to stay pretty even and all should go ok.

I'm not actually worried about the loan interest rates (unless they're really bad), I'm worried about being accepted as it's well over ten times any other amount of credit I've taken before (I've never taken a mortgage)

[Jimmy Recard]

Pheo said:

Each individual lender has their own scoring methodology depending on the type of risk they want to take on. So these experian things are only illustrative. Get a free one from Noddle if you must.

To sort the fraud piece out make sure it's registered with CIFAS and then contact the credit reference agencies to put a notice of correction / note against it. This will cause lenders credit referencing process to route t manual review so shouldn't impact you too much.

Thanks - this is noted and very helpful. I'll be on the phone/writing emails to that effect in the morning.

[Jockman]

My understanding is not in accordance with your strategy mon ami

If your scoring rates you as viable for say £200k of loans then any allowance you have on an item such as a credit card will be subtracted from this - regardless of whether you use that allowance or not.

Close any credit cards you don't use and reduce any limits or overdrafts you don't need so that you might have available to you the full £200k or as near as damn.

[Jimmy Recard]

Jockman said:

My understanding is not in accordance with your strategy mon ami

If your scoring rates you as viable for say £200k of loans then any allowance you have on an item such as a credit card will be subtracted from this - regardless of whether you use that allowance or not.

Close any credit cards you don't use and reduce any limits or overdrafts you don't need so that you might have available to you the full £200k or as near as damn.

Thanks - I heard something to this effect before so this is what I'm trying to balance.

I will have to balance that because I don't want to close all my cards and reduce my limits to nothing!

[Stevemr]

I think limits of a couple of grand are fine.
Make sure you use your credit cards and pay off in full every month.
Do not miss any payments.