Credit rating- which is correct

[PeggyLeggy]

Hi!

I have had bad credit for years, something I’m very ashamed about and has obviously held me back in certain things. Just basically a combination of bad money management and abusive relationship where I had no money

SO. I’ve been trying very very very hard to improve it, paying things off, payment plans, no missed payments etc. FINALLY my Experian credit rating went from very poor to poor (I know that’s not a huge thing but it was close to being in the fair category so the right direction!).

I have checked my rating today and irs gone down a huge 126 points and I’m right back in very poor 😭😭. I did take out a Monzo e-credit card (not sure what it’s called) to make the deposit on my holiday (added protection) and was pleased that I’m now in a place where I’m not instantly declined. But I had no idea it would affect my credit rating that much! I have already paid back half of the £500 balance (I paid that back instantly)

however I then checked my clear score which goes through equifax and it’s gone up on there? And I can check it though my banking and it’s gone up a point?

So which one is more accurate/approved by lenders? I will pay for the Experian plus account but it’s £15 and I’ll have to wait till payday but I was just wondering if anyone had any ideas?

Credit scores are essentially meaningless, as there is no standardised system/method for calculating them, it's down to the individual CRAs.

What lenders are interested in is your credit history, which is different, and includes factors such as payment history, number missed payments/defaults, CCJs, % of credit utilisation, etc.

Oh that’s good to know then, my history since 2019 has been fine, not one single missed payments, paid 3 different debts off (and 3 payments away from paying off another!)

It could be your credit utilisation rate which affects your credit score - the CRUs only update once a month, so it may have logged the £500 spent but not yet the payments you've made. Ideally it should be below 25% (i.e. you use less than 25% of the credit available to you) for an optimal credit score.

I also had terrible credit and worked tirelessly these last 7 years to get it back up, and get a mortgage - mine has plummeted again as I got married and put some things for the wedding on credit cards, but working on fixing it!!

Don’t pay for Experian plus. I signed up to credit karma and get a report monthly as part of that it gives you pointers to improve your rating - look at that information rather than focussing on your score. These are generally the things that mortgage lenders.
Generally focus on making the payments religiously and more than the minimum payments where you have a credit card balance. Reducing the amount of credit that your using. It’s also worth keep a long running credit card / current account open as well.

Also make sure you’re registered to vote at your address. This also helps with electronic identification