To think this is unfair (credit score)

[lalalalaloo]

I reinsured my car in June, my Experian credit score has gone down 37pts because 'you've opened a new credit account'

I have never had this happen before and I have been insuring my car for years!

Surely this can't be right? I have to insure my car!

And is car insurance classed as a 'credit account'?

I'm going to send an email but it's really pissed me off.

I've just checked mine and mine has gone down 50 points. Exact same thing. Ensure insurance services! I've had the same insurance company for years too and always just paid monthly. It's never been on there before.

My water bill account is on mine!!!

Your insurance will be a credit account if you pay in installments, because technically you owe them the money you haven't paid yet.

If you pay for your insurance mo thly then yes it is fair it is on there. If you don't pay I be month then it is a default on your account.

If you pay annually then no its not fair

Paying monthly is taking out a credit product- you are splitting the payment over 12 months. So it is correct.

If you pay monthly then there's a credit agreement in the background but I agree, it's unfair to decrease your score!

@claireb707

If you pay for your insurance mo thly then yes it is fair it is on there. If you don't pay I be month then it is a default on your account.

If you pay annually then no its not fair

I be = it one

Damn fat fingers

Your credit score is a fairly meaningless number but if you have to pay your car insurance monthly, then it suggests that you're struggling as it's more expensive to do it that way do you would only do it if you had to.

Hence you're giving a negative signal about your finances.

Everyone's is in the same boat I'm afraid. Utilities, bank accounts, loans, insurances all effect the scores. I agree though, it feels punitive especially when it's the law to have car insurance.

@BarbaraofSeville I disagree with this entirely. My policy costs £700 a year which is a lot to pay in one go, but irrespective of that, there is no charge for credit and so it’s just the premium divided by 12. I don’t see why this should damage a credit score!! It’s very standard??

Credit score is a meaningless number. Only you can see it.
Financial institutions only take in to consideration your credit HISTORY. As long as you pay off your debt it won't matter.

[quote Youngatheart00]@BarbaraofSeville I disagree with this entirely. My policy costs £700 a year which is a lot to pay in one go, but irrespective of that, there is no charge for credit and so it’s just the premium divided by 12. I don’t see why this should damage a credit score!! It’s very standard??[/quote]
Because you are buying something that costs £700, but are not paying them £700 in one go?

Instead they are ‘loaning’ you £700 to pay that bill, and you are repaying that loan.

Almost all car insurance companies charge interest if you pay monthly so you must have been lucky if you find one that doesn't and is also the cheapest annual premium.

My policy costs £700 a year which is a lot to pay in one go

Being unable to budget for that marks you as a higher credit risk. You might not like that it does, but that’s the way it is. If you want to avoid it that, you put away 60 quid a month so you can pay for it next year.

Started a thread but no responses as yet. I have a 4 year old default which was paid of soon after defaulting, anyone know if this will affect me when I get another fixed rate with the same lender at the end of the 5 year fixed???

Credit score is a meaningless number. Only you can see it. Financial institutions only take in to consideration your credit HISTORY. As long as you pay off your debt it won't matter.

Financial institutions take in to account what is on your credit file. If you have a lot of credit, they will note you as a higher risk. The credit score is a tool the credit company use to help people understand their credit health. You can’t have a low score and get good credit terms.

@Fancynancy01 a default will basically make your credit score trash for 6 years, even if paid immediately.

I didn’t about about car insurance. I always pay for mine monthly tbh, but never noticed this - although I only really check my credit score intermittently.

Extremely, extremely unlikely turned down credit just because you pay your car insurance monthly. Unless you miss a payment.

I agree also @BarbaraofSeville I’ve always had to pay interest by paying monthly. Maybe I’ll pay it in one go when I renew! I’ve never even really out much thought into it

@Tunnocks34 this is what I was dreading, will the same mortgage company still offer me abother decent fixed rate

Probably, they can’t take the mortgage off you, and so it’s in their interest to keep it affordable.

Santander, when I came to remortgage, basically sent is a letter stating it would be immediate, with no new checks etc. I just logged into my online portal, and chose a new rate (which was £100 a month cheaper). But that was without removing enquire or changing the terms.

Your best bet would be to call up and speak to an advisor.

Enquire = equity.

Although your credit score temporarily takes a hit it will go back up and can even improve as you continue making payments. No lender will be concerned that you pay your insurance monthly at all. They are looking to see that you manage your credit well. In fact, they include the utilities, phone contracts and insurance policies which all show you are good at managing any credit. If you had none of those on your credit report you would have a lower score anyway. I checked my credit score a few years ago and it was mediocre. Not because I had defaulted but because I had no credit. No loans and no credit cards. I took out a credit card specifically to raise my credit rating. Essentially, the slight hit on your rating is meaningless.

Who is this insurer who doesn't charge to pay monthly?