Removing the guesswork from Credit Scoring
James Jones Public Relationship Manager of Experian PLC, presented a very insightful overview of credit scoring myths and educating tips at the Ask the Expert Session held in December.
In the UK there are some 850,000 individuals who have immediate access to their credit reports but an astounding 8.5million are known as “invisibles” because they may have no credit in their name. Often their household bills are in a partner’s name, or they are not registered to vote. Credit Reference Agencies retain data relating to our credit payment history which is analyzed along with an application form and the lenders own records. This then allows creditors to assess the risk of repayment.,
This does not exist, the information held is factual.
Another person can affect my credit score
This is only if you are linked with that person through a joint credit agreement, for example, a joint mortgage or joint loan agreement.
Credit refusal will damage my score
All credit application history is held by Credit Reference Agencies and can be viewed by a lender, but a credit refusal decision cannot be.
Checking a report can damage my score
This has no impact at all.
Credit Reference Agencies make the decision to lend money
This is not true, the Credit Reference Agencies retain data, but only a lender makes the decision whether or not to process an application for credit.
,
It has no impact on a credit score and has a soft footprint. It gives an accurate indicator and preapproval prior to completing an application. This takes the guesswork out of applications in real time.
The table below details how the points on a credit score are applied based on an individual’s financial behaviour.
Individuals can improve their score by implementing or avoiding the below actions.
Credit Scoring Myths…busted!
Credit BlacklistingThis does not exist, the information held is factual.
Another person can affect my credit score
This is only if you are linked with that person through a joint credit agreement, for example, a joint mortgage or joint loan agreement.
Credit refusal will damage my score
All credit application history is held by Credit Reference Agencies and can be viewed by a lender, but a credit refusal decision cannot be.
Checking a report can damage my score
This has no impact at all.
Credit Reference Agencies make the decision to lend money
This is not true, the Credit Reference Agencies retain data, but only a lender makes the decision whether or not to process an application for credit.
,
Experian Comparison Tool
A new free comparison site facility offered by Experian allows an individual to check immediate eligibility for a loan.It has no impact on a credit score and has a soft footprint. It gives an accurate indicator and preapproval prior to completing an application. This takes the guesswork out of applications in real time.
The table below details how the points on a credit score are applied based on an individual’s financial behaviour.
Individuals can improve their score by implementing or avoiding the below actions.
| Register to vote | +50 points |
| Have a credit limit over £5,000 | +20 points |
| No new accounts opened in the last six months | +50 points |
| Use less than 30% of your credit card limit | +90 points |
| Low or zero balances | +60 points |
| Pay a bill late | -130 points |
| Use over 90% of a credit limit | -50 points |
| Have an account less than 6 months old | -40 points |
| Get a county court judgment (CCJ) or equivalent | -250 points |
| Have a default account | -350 points |