Credit Scoring Questions

stoozers and rate tart's questions answered

Anyone who borrows money or who intends to borrow it, would be advised to have a very basic acquaintance with the role of CRAs and what sort of factors affect a credit score. However, those who are involved in stoozing and rate-tarting should understand it as fully as possible, in order to maximise their use of good credit card offers. Since Stooz and Clariman have been involved in stoozing, there have been some important credit scoring questions which have not really been answered before with any certainty. With the help of Experian and our industry-insider, we can now answer some of these important questions.

Rate Tart Questions

Is applying for a new credit card, once every 6 months, bad for my credit rating?

It is unlikely to affect your credit rating, providing your repayments are on time. Switching cards every 6 months should not generate an abnormal amount of credit searches because searches are deleted after 12 months. Some people worry that lenders won't want them as customers if they take advantage of special offers, but this is not true. Lenders get a fee each time a card is used: they don't rely on the borrower paying interest.

Can the number of credit cards I have affect my credit rating?

Swapping cards from time to time to take advantage of low interest or 0% introductory offers shouldn't have an adverse affect on your creditworthiness. But you do need to make sure you do not apply for or have too many cards at once, you make your repayments on time and you do not let your level of borrowing get out of control.

Every time you apply for credit you will give the lender permission to search your credit report. Details of each search are kept on your report for up to 2 years (normally 1 year). An abnormal number of credit searches on your report might make a new lender worry that you have been the victim of fraud or that you have applied for an excessive amount of credit. As a result, you might get turned down. But switching 1 or 2 cards every 6 to 9 months won't generate an abnormal number of searches.

When you apply for a new card, lenders will also look at your repayment history, how many cards you have already and how much available credit you have. This is because of the pressure on lenders to make responsible credit decisions and not just aim for profit. So, as well as making sure you make all your payments on time, it's important you close down any credit cards that you no longer use, otherwise new lenders might be unwilling to give you further credit. You should also bear in mind that a lender is unlikely to accept a new application from someone who already has one of its cards but does not use it.

Make sure you do not take on an unreasonable amount of debt. Although the cost of servicing credit is historically low just now, there is no guarantee that lenders will continue to offer these introductory deals. As a result, you need to consider how you would manage this debt if you had to start paying interest.

Do lenders look for rate-tarting patterns in people's credit files?

The underwriter could well do, but systems generally would not. Note that stoozing and tarting will generally adversely impact your creditworthiness even if lenders are not looking for these particular activities.

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