Experian Q&A

Credit Scoring

How fluid is the allocation of credit limits? Some insurance companies recalculate rates for premiums in real-time and I wondered whether having a couple of people with exactly your customer profile defaulting on them the day before would have an effect?
| Spikey |

Lender's scorecards are regularly adjusted to reflect changing behaviour and a changing economy, but not on a daily basis. For details you would have to ask a lender.

I'd be interested in Experian's comments on the pros and cons of keeping cards open or closing them at the end of an introductory offer (i.e. when they are no longer required).
| Spikey |

You should always close accounts you no longer use, because some lenders may look at how much available credit you already have. Failure to close accounts also provides greater opportunity for the identity fraudster.

I'd be interested to know how the plans by lenders to share more information are going to affect credit histories, how it will appear, what will be shared and whether other lenders are considering similar moves?
| MPH80 |

Nothing has yet been confirmed.

What effect does owning your own home outright have on your credit score? Do lenders see that you have a mortgage that has been "settled" and know that you have paid it off, or might they assume you have sold to rent?
| Clariman |

Most lenders gather information about your residential status from your credit application form, not your credit report. Mortgage information on your report would be used to determine how much debt you have and whether or not you are in arrears. Lenders are unlikely to 'assume' anything so detailed as you describe from a credit report.

Does Experian think that a stoozer paying slightly more than minimum payments would be less likely to be put into the same category by lenders as an overstretched borrower paying only minimum payments?
| sly_dog_jonah |

Lenders don't want to lend to people who are struggling with their credit commitments already, so their scorecards will usually analyse current levels of debt and disposable income.

Bearing in mind the recent change that my mortgage is now shown on my report, what effect will this have on my Experian National Credit Score?
| spikey |

If your mortgage is up to date your score may well improve. But there's an easy way to find out! CreditExpert members can purchase their National Credit Score for 4.99 and see if their impression of their credit status is correct, and see how this changes over time.

Bearing in mind the recent change that my mortgage is now shown on my report, what effect does Experian think this will have on future applications, in terms of acceptances, and credit limits?
| spikey |

Doesn't really matter what we think - this really depends on the policies of any lender you apply to.

If you have a relatively low mortgage in relation to property value, but also a large amount of credit card debt, does the availability of equity in the property get taken into account?
| zeberdy |

Yes, if you are applying for a mortgage, because mortgage lenders do look at things like that and, indeed, have much more detailed application forms but these details are likely to be less of a factor with other forms of credit such as credit cards and bank loans.

Following on from Q8, would having a relatively low mortgage but a considerable value on cards effect an application for an advance on a mortgage or for a mortgage extension?
| zeberdy |

From personal experience, mortgage lenders will look at everything and draw up a financial statement to assess your current situation. They also often manually underwrite mortgage applications instead of relying on credit scoring alone.

After all cards are cleared, how long does it take to rebuild a good credit rating - assuming that you had been stoozing an amount greater than your annual salary?
| zeberdy |

As long as you've made all required payments on time, your credit record should be in good shape.

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Experian Q&A

Credit Scoring

Lender's scorecards are regularly adjusted to reflect changing behaviour and a changing economy, but not on a daily basis. For details you would have to ask a lender.

You should always close accounts you no longer use, because some lenders may look at how much available credit you already have. Failure to close accounts also provides greater opportunity for the identity fraudster.

Nothing has yet been confirmed.

Lenders don't want to lend to people who are struggling with their credit commitments already, so their scorecards will usually analyse current levels of debt and disposable income.

If your mortgage is up to date your score may well improve. But there's an easy way to find out! CreditExpert members can purchase their National Credit Score for 4.99 and see if their impression of their credit status is correct, and see how this changes over time.

Doesn't really matter what we think - this really depends on the policies of any lender you apply to.

Yes, if you are applying for a mortgage, because mortgage lenders do look at things like that and, indeed, have much more detailed application forms but these details are likely to be less of a factor with other forms of credit such as credit cards and bank loans.

From personal experience, mortgage lenders will look at everything and draw up a financial statement to assess your current situation. They also often manually underwrite mortgage applications instead of relying on credit scoring alone.

As long as you've made all required payments on time, your credit record should be in good shape.