09 Mar 2015

A question about : Experian credit score

Hi,

Did experian credit rating today and got 3 positive points and 3 negative:

1 -The usage of your available credit indicates a higher risk
2 -You have no successfully settled non-mail order accounts.
3 -The value of your highest credit limit indicates a higher risk

What do they mean?

Cheers

Best answers:

  • 1. what it says on the tin - you use a lot of the credit you have available. (unfortunately if this is loans you'll always be using 100% of the loan amount remaining)
    2. you haven't finished paying a loan or paid off a credit card
    3. this one is more of a challenge as it is meaningless unless the credit card company know your income.
    Collectively these indicate to a potential lender the following: You have borrowed a lot, which as yet you have not paid back and may be at risk of defaulting.
    One risk of spending on cards to earn cash back or get protection, (if this is what you do), is that it can make your balance and usage look high.
    I would try and settle an account if you can it will look favourable. Try to cut back a little so you are showing to use less of your available credit.
  • Thank you for explanation.
    I do appreciate your help!
  • What the credit score means is that you wasted your money. The score is worthless.
  • This is my status on Experian:
    Current score Fair 874
    3 Positives
    The usage of your available credit indicates a lower risk
    The value of your highest credit limit indicates a lower risk
    You have a significant amount of successfully settled non-mail order accounts
    1 negative
    You have recently opened 1 or more new credit accounts.
    All my credit accounts are rated satisfactory as I have never been late with or missed a payment in my life. All my loans have been paid off on time and in full. When I moved house in January I was forced to change from BT to Virgin as BT could not get me a phone line for nearly 3 months where Virgin could sort it in 3 days. My previous BT payment record has been flawless. I also updated my mobile to an O2 account in January but again have a record of flawless payment for the previous two years of my Vodaphone account.
    My question is why do I do not rate good or excellent when my positives by far outweigh my negatives and by any pragmatic measure, my 'negatives' aren't true negatives at all - e.g. missed payments or defaults?
    How can this be? Can anyone explain?
  • But their rating got me turned down for a mortgage. the mortgage company said there was no problem with affordability - the problem was with our Experian credit rating...so that makes it important, doesn't it?
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