Credit scoring

[meagain]

I have been rejected for an account because apparently I didn't attract a high enough credit score, however, according to annualcreditreport, there is nothing on my record apart from a 1 month arrears on my credit card (which is due to me disputing the balance - guess why ...).

 

Since the scoring is based on my personal information, am I right in thinking I have a right under the Data Protection Act for any and all information used in reaching a lending decision and how it was arrived at? (S7 perhaps?)

[bb_mack]

Hi Meagain

 

I was rejected for credit recently and I was told that I didn't have a good enough credit score even though my credit report is now in a very healthy position!

 

I phoned the lender to tell them this and they basically told me that I didn't fit the type of customer they were looking for! lol....so i'm assuming they want a customer who has lots of arrears recorded etc (so they can make lots of money out of them - afterall if they have a record of previously making payments late they can charge lots of late payment fees!)

 

It was also said to me that credit is a privilege and not a right....fair enough. They said that they didn't have to tell me why they declined me? I don't know if this is correct......

 

I applied to transfer the balance of one of credit cards yesterday and was accepted no problem so my credit score seemed to be in good order with this particular company!

 

This credit scoring lark is mental!

 

Excellent site by the way I'm really enjoying reading how sucessfull everyone has been with the bank charges! About time we all came together to stop the money grabbing banks from getting any more of our hard earned cash!

[Guest NATTIE]

credit scoring can be affected by a number of factors, for example moving house a lot, not being registered on voters roll, age, whether bills are paid on time, etc,ect. All factors that go into credit scoring. Also, applying for a number of accounts. store cards, credit cards in a short space of time, can affect your credit score.

[bb_mack]

Hi Natweststaffmember

 

Am I right in thinking that ultimately, the company who you apply to set the scoring criteria and therefore it is entirely up to the company to decide by how much the items affect your score? So they can be selective?

 

For example if I apply to company A and they decline me for having 3 searches on my report and this makes the overall score less than they accept, and then apply to company B the next day (with 4 searches at this time) and they accept me as my score with them will only be below the acceptable level when it hits 5 searches (their criteria)?

 

Thanks

[Guest NATTIE]

No poss misread there. The more searches you have done in a short period of time can affect your credit score. So say 5 searches in a short space of time can worsen credit rating. However, I have also heard or people with no problem with credit, ie just use their one account and no problems whatsoever, refused for a CC. So it is a bit of a minefield out there at times

[bb_mack]

Thanks again, what I am trying to clarify is if one company believes that 3 searches within a short space of time is too many they will decline you, however another company may believe that 5 searches are too many within a short space of time (so each company you apply to may have different scoring critieria?) i.e. one company might be more strict than another?

[Guest NATTIE]

I think most use credit scoring agencies, like experian and equifax which are the main ones

[bb_mack]

Oh right, because when I phoned Virgin (the company who declined my first app) they said that they only got my report from Experian but the score didn't come from Experian? I'm confused, I might give them a ring tomorrow to get an answer as I got a score from one of the credit reference agencies a few months ago and it said online that they didn't provide this to lenders just a guideline to see how the actual information contained on my report might affect a lending decision. Will let you know what they say tomorrow!

[bb_mack]

Hi again

 

Just to let you know I just spoke to an Administrator "Zooman" in the chatroom and he said that cra's just give a report to a lender and the score actually comes from the lender, so I reckon my theory is right that they are selective based on the type of customer they personally are looking for and that some are more strict than others when it comes to deciding what info affects a score.

 

If they weren't then I wouldn't have been declined one day and accepted the next

[meagain]

When I queried the failure today, I was told it was internal, and that a CRA search hadn't been performed. In that case, do I have a case under S7 to be told how the decision to decline was arrived at?

[bb_mack]

Hi Meagain

 

I telephoned Experian today who informed me that the company doesn't legally have to tell you why they have declined you but they should give you a more specific reason if you ask. They said that they should also be able to tell you if they declined you because of the information appearing on your credit report or whether it was to do with your application details i.e. age, income, etc

[meagain]

Hi Meagain

 

I telephoned Experian today ...

 

I don't know which question you're answering, but it's certainly not the one I asked ;-)

[bb_mack]

Sorry for any confusion - I thought that you had asked if you had a right under S7 to be told how the decision to decline was arrived at?

 

I posted to you what I had found out on your behalf?

[meagain]

Sorry for any confusion - I thought that you had asked if you had a right under S7 to be told how the decision to decline was arrived at?

 

Yes. Information on how a purely internal scoring decision was arrived at.

 

When I queried the failure today, I was told it was internal, and that a CRA search hadn't been performed.

 

Perhaps I could have made that a little more clear at the start. That said, as we've seen, Experian tend not to know much about who is legally entitled to what. (They like to think they "have a legal right to hold information", whereas Efx and CC will correctly tell you "the law allows [them] to hold information" - a minor, but hugely important, difference).

 

Anyway, when I asked why I was declined, I was told that the lack of prior business with that bank had affected it adversely, and that on the CRA search that they later did, I was told that they had noted that I was "not on the electoral roll". Which is odd, since my own research (via ACR) produced not one but two ER hits.

[bb_mack]

I think your VR info may be recorded at a different variation of your address to the address searched by the company looking at your cra report. I have a house name, house number and street name and my VR info was recorded as the house name in the street name field so when lenders searched my report using the correct variation of my address, they were not seeing this info. Hope this helps ;-0