Change in Credit Score

[Pierre_a]

Hi All,

I notice my credit score dropped by a very small amount this month - 8 points. The only thing that changed was I cancelled one of my cards. Is this small drop a result of the change to my credit utilization ratio bought about by my reducing my overall available credit by 40% - or is something I haven't thought of at work here?

Pierre

 

[burmans]

Credit utilisation not really a factor in OZ, it may be when Comprehensive Credit Reporting really gets going (while some are reporting in reality not enough for this to be very useful yet).

A couple of things spring to mind
1. Length of credit history not likely to be a factor as without CCR they don't know you have cancelled your card
2. Another possible cause is information dropping off your account after 5 years. Usually things dropping off is good except in the cases of home loans. People with home loans are generally better credit risks, hence if you have had your loan > 5 years this would have dropped off your file.

 

[Pierre_a]

How odd - my home loan is only one year old, and my entire Australian credit history eighteen months.

Thanks for the insight re. Utilisation ratios, thats new information to me.