Huge unexplained drop in credit score

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Pierre_a

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Jul 13, 2015
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Hi All,

So last month my credit score dropped a few points without there being any activity on my file, I posted a question on that subject out of curiousity.

This month my score has declined by a terrifying 152 points (according to Creditsavvy), leaving my score in the toilet. There is nothing new on my credit file whatsoever to indicate why this may be and my history is flawless with only three credit applications in the last 12 months plus a mortgage application.

Can anyone suggest a way to drill into this to unwind why my score has plummeted so precipitously?

Many thanks

Pierre
 
Could it be that something from the past that was having a positive effect on your score has progressed too far into the past to have an effect anymore?
 
Could it be that something from the past that was having a positive effect on your score has progressed too far into the past to have an effect anymore?

I agree, possibly a home loan (which is a considerable positive to your credit worthiness) being greater than 5 years since application and hence now dropped.
 
Personally, when my mortgage moved out of the last 12 month period - leaving only credit card apps - my score dropped a bit.

I would recommend charting all applications so you can look at your last 12, 24, 36, 48, 60 months on a rolling basis and figure out what has caused changes in your score.

Two other things could have happened though - more info, such as comprehensive credit reports, may have been added to your profile and/or the ratings agency in question may have altered the way they calculate their score.
 
I think that's the most likely scenario. Mine fell 200 points after an Amex platinum charge card app in October and not recovered since. Only had one other application last year.
Noticed on my latest Veda report Amex is reporting now including credit limits. I'm assuming my Amex limits are weighing on my score.
 
I doubt its anything dropping off my file as I am a recent migrant to Australia (18 months) - this leaves a change in the method of calculation as the only reasonable explanation.

The thing is that my score is now 599 - only okay. Logically I would think I am an excellent proposition given I don't have any negative marks, always fully settle my balances each month and perceive that the number of applications I have made is not excessive (compared to some anyway!). Actually, I'm a little affronted!
 
It's 1200 by the looks of it.

Correct - Veda is out of 1200, Experian out of 1000.

Experian range:

  • 800 - 1000:Excellent
  • 700 - 799:Very good
  • 625 - 699:Good
  • 550 - 624:Okay
  • 0 - 549:Below average
Veda's grades are percentage bands that are directly linked, according to their scores, to a multiple of the likelihood of default vs the population average.

Below average (Bottom 20%) - Based on history, scores in this category indicate that an adverse event such as a default, court judgement, personal insolvency or similar, is more likely to be recorded on a credit file in the next 12 months when compared to the average credit active Australian population as recorded on Veda's credit bureau.
Average (21% - 40%) - Based on history, scores in this category indicate that an adverse event such as a default, court judgement, personal insolvency or similar, is as likely to be recorded on a credit file in the next 12 months when compared to the average credit active Australian population as recorded on Veda's credit bureau.
Good (41% - 60%) - Based on history, scores in this category indicate that an adverse event such as a default, court judgement, personal insolvency or similar, is less likely to be recorded on a credit file in the next 12 months when compared to the average credit active Australian population as recorded on Veda's credit bureau.
In other words, the odds of no adverse events occurring on your credit file in the next 12 months are better than the average population odds. Hence this score has been classed as the good population grade.
Very Good (61% - 80%) - Based on history, scores in this category indicate that an adverse event such as a default, court judgement, personal insolvency or similar, is unlikely to be recorded on a credit file in the next 12 months when compared to the average credit active Australian population as recorded on Veda's credit bureau.
In other words, the odds of no adverse events occurring on your credit file in the next 12 months are more than 2 times better than the average population odds. Hence this score has been classed as the very good population grade.
Excellent (81% - 100%) - Based on history, scores in this category indicate that an adverse event such as a default, court judgement, personal insolvency or similar, is highly unlikely to be recorded on a credit file in the next 12 months when compared to the average credit active Australian population as recorded on Veda's credit bureau.
In other words, the odds of no adverse events occurring on your credit file in the next 12 months are more than 5 times better than the average population odds. Hence this score has been classed as the excellent population grade.
The Australian credit active population scores on Veda's credit reporting database are reviewed regularly calculated as required to account for population and economic changes.
 
I doubt its anything dropping off my file as I am a recent migrant to Australia (18 months) - this leaves a change in the method of calculation as the only reasonable explanation.

The thing is that my score is now 599 - only okay. Logically I would think I am an excellent proposition given I don't have any negative marks, always fully settle my balances each month and perceive that the number of applications I have made is not excessive (compared to some anyway!). Actually, I'm a little affronted!
Change in method of calculating is certainly a possibility given that some credit providers have started contributing Comprehensive data. My reason for not suggesting this, was the industry view was always that you couldn't have a comprehensive credit reporting score without substantial data (otherwise people's scores would fluctuate widely as new credit providers start contributing). It was not my understanding we were at that substantial data point but I haven't checked my Veda Credit Score recently (I know my Experian one hasn't changed recently - but they use different methodologies so that doesn't mean anything).

Would be interesting to hear from anyone who has seen a Veda Credit Report recently if any of the majors are contributing Comprehensive data.
 
I reckon whatever is driving credit savvy is a load of BS. I have worked in finance for 20 years, so I know how it the systems work and what really causes risk. the observed changes in my own score really do not make any sense at all.

Jus one example is dropping 300 points because I refinanced my 200k home loan when I have lived in the same house and same job for 10+ years, give me a break.
Since then I made a couple applications for credit card, one is aAmex and neither is recorded in creditsavvy.

Seems whoever creditsavvy is, very few providers are using them, so thy are a new third player in the market behind Veda and D&B. I say just ignore them as irrelevant.
 
I reckon whatever is driving credit savvy is a load of BS. I have worked in finance for 20 years, so I know how it the systems work and what really causes risk. the observed changes in my own score really do not make any sense at all.

Jus one example is dropping 300 points because I refinanced my 200k home loan when I have lived in the same house and same job for 10+ years, give me a break.
Since then I made a couple applications for credit card, one is aAmex and neither is recorded in creditsavvy.

Seems whoever creditsavvy is, very few providers are using them, so thy are a new third player in the market behind Veda and D&B. I say just ignore them as irrelevant.

Creditsavvy is based on the Experian score, which is relatively new, and is partly owned by the commonwealth bank. The leading theory is that the banks are trying to spin up their own agency to compete with veda and D&B.

My creditsavvy account personally lists amex's, as well as all CCs from the major banks, so they are certainly building up the info.

But remember the 'score' is relatively useless to anyone - a creditor will look at your application history, which is the important bit, before making their own decision. They rarely - if ever - take the veda/experian score itself into account.
 
Creditsavvy is based on the Experian score, which is relatively new, and is partly owned by the commonwealth bank. The leading theory is that the banks are trying to spin up their own agency to compete with veda and D&B.

My creditsavvy account personally lists amex's, as well as all CCs from the major banks, so they are certainly building up the info.

But remember the 'score' is relatively useless to anyone - a creditor will look at your application history, which is the important bit, before making their own decision. They rarely - if ever - take the veda/experian score itself into account.
The score is indeed currently pretty useless but I think we should all be aware of mature Comprehensive Reporting markets where it is far from useless. As an example there are probably more Americans who can quote their FICO score than can actually place their own country on a map, and that's because the first thing a lender asks you when you walk in the door is "what's your FICO score".

Creditsavvy/Experian are the smaller player in the market so definitely have less data (and in my experience there is about a 1 month lag before they get the data). There is no compulsion on our Comprehensive Credit Reporting rules, i.e. credit providers don't have to report this info to anyone, which is why the slow uptake. But things will definitely change over time and this score will become more important, we have already seen more than one company offering better rates/conditions dependant on your score!.
 
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