Over the weekend I received an email to say my credit score has dropped. I thought this would make a great article. It tells me to click on the link to find out why.
My favourite phrase when people mention credit reports…
Ignore the score!
For the majority of people, they do not need to worry about changes to scores, chances are it is just a slight tweak to how they score you or something that is expected – an increase in credit card balances, new credit being taken out etc. For the others it will likely be bad credit you know about. There will be a minor few that might have become a victim or fraud and someone taking out credit in your name.
I clicked on the link to “find out why” and guess what… It does not tell me why it has dropped.
However, this is why I tell people to ignore the score, there are no negative markers. So why would my credit score drop? There is no reason for my score to drop or increase, nothing has changed massively. My mortgage balance has come down, my car finance has come down and thats it – surely good things?
Call me cynical
I do wonder if it is a reason to get me to log in and take out new finance through them. Or to get me to pay the monthly subscription to get a score which is worthless.
It is funny that I logged in to find suggestions for new credit cards, loans, mortgages etc. It is almost like a monthly reminder that I could get new credit.
Your credit score
There is no universal credit score. There are 3 credit agencies, experian, equifax and transunion. They all score you using their own scoring system. The only people who sees this credit score is you.
When you apply for a mortgage, the high street lenders do credit score you. But they score you using their own calculation. Every lender is different – this is why you can get declined with one lender but accepted with another. Almost anything can play a part to different degrees – your deposit, your income, your credit history, your affordability, length of time in a job – even when you have a landline phone number or not!
Do not panic
If your “credit score” drops, dont worry. If it drops for a reason such as late payments then yes it will make things more difficult when applying for a mortgage. But dont worry, we can deal with that. If your score goes down because you have taken out a new credit card to do a balance transfer, dont worry about it. Yes, it is a credit check but the chances of that having any meaningful effect on an application is minimal.
But if you are looking for a mortgage, get in touch. We have seen a lot of credit reports over our time and we can fly through them to determine if there are any issues that we need to overcome or not.