Credit Scoring - The insiders guide

What influences a credit score

and how does this affect stoozers and rate tarts?

Any CCJs, defaults or missed payments will have a negative effect; therefore it is essential that stoozers and rate-tarts operate their credit cards with great diligence.

Any active credit accounts with significant balances recorded at the CRA will have a negative effect. There is a silver lining to this cloud for the rate-tart who is paying off his/her debts. It means that your credit rating will get better and better as you reduce your credit balances. For the stoozer, there is little than can be done to mitigate against this factor, since the stoozer's aim is to maximise the amount in their stooz pot. Paying off a large amount of debt before making a subsequent application will obviously improve matters to some extent. However, it is incumbent on the stoozer to not get too carried away, trying to build a limitless stooz pot!

The number of active credit accounts in use will have a negative effect, so a stoozer would be better with fewer cards with higher limits, rather than a greater number of cards with lower limits.

In addition to the number of accounts in use, the lenders will also look at how much their credit limits have been utilised. The stoozer may be better not to max out all cards, but there is a trade-off. If you leave headroom on all your cards, then you will need more cards. This is a bit of a Catch-22 situation. Again this is good for the rate-tart who is paying off a debt.

The type of neighbourhood you live in has an effect. This is not the specific neighbourhood that you live in, but is a classification of types of neighbourhood. You will be partly assessed based on what the performance of people in neighbourhood's like yours has been. There is little that the stoozer or rate tart can do about this.

The number of searches and accounts opened in the last three to six months has an affect on your credit score. The stoozer or rate-tart should try to minimise the number of credit searches that are done on their file. Stoozing.com's guidance has been that either of the following approaches seems to be acceptable: either one search per month for no more than 10 months of the year, or 2 or 3 applications within a month followed by none for 4 to 6 months.

The number of accounts that are settled is a good sign, especially when the payment history has been faultless on them. This is one that would appear to work in the stoozer's favour.

The total balance on new cards opened in the last 12 months. This is an occupational hazard for the stoozer because it is highly likely that all the stooz cards in use are less than 12 months old and will have significant balances on them. Stoozers should look to exploit long introductory balance rates to mitigate this and seek extensions from existing providers.

Having your status confirmed as being on the Electoral Roll at your current address is very important. The number of years on the roll at the address is also taken into account.

Post Code (again) - not where you live, but how good is the area you live in - used most when other CRA data is thin / missing.

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