Credit Card Co's & Credit Ratings

So I get in from work this afternoon, and there is a letter from 1 of the 2 card companies I use.

"Dear Beckers ..... we have cut your credit limit from £14,500 to £1000 because of information we have received from a credit check agency .... yada yada yada"

I am thinking WTF. So I ring them

Basically, they can't tell me why they reckon my score has gone through the floor ...they just have the number, so they have to cut my available credit line.

Now I'm really worried, 'cos I know I'm sound, no missed payments on anything, no defaults, nothing. I'm thinking identity theft, or "wtf has my ex wife done"

So I ring our company credit controller for a chat, and on his advice I have just done the Equifax thing, the free bit ...and subsequently paid for a full credit score report

Less than 300 is very poor, 400 - 474 is good, over 475 is excellent .... I scored 462 again

I'm pretty pissed of with Lloyds CC at the moment, they have trashed my afternoon, cut my credit, and made me spend £15 I didn't need too

Anyone else had anything similar

I think I know why...


A company called Credit Issues are going through a huge marketing drive at the moment. They have been in The Daily Mail, and on BBC and local radio.

They take companies (lenders) to court over issues with credit agreements (signed pre April 2005)

By cutting the lending it is stopping you from running up a 12k credit card, then running to the company and having it deemed an unenforceable contract, stopping you from taking 12k off them. I am guessing they have cut it to a grand as you rarely go over a grand a month anyway?

This is no different to what Egg did a few years ago.

These days I do rarely use cards much.

But I did ask the question "Are you just cutting credit lines across the board" and was told, catagoricallly, "no, it's almost certainly to do with your credit score"

fuckers

The buggers keep trying to increase mine without asking. When I ask why the answer is "well mr moth, you clear your balance every month"

That's because it's rarely more than a grand you twats. I'd probably have a bit more difficulty clearing my present limit of £22000 every fucking month.

Financial services, run by grasping morons

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onli mrns Us txt spk

It has nothing to do with your credit score.

so they lied to me

Sounds like they are doing a fraud prevention exercise and lied to you.

But, IIRC your credit score drops through the floor if you have no debt, been a bad boy and paid loans off?

1 - To do the credit score after the application stage requires YOUR permission

2 - For the credit reference agency to contact them unsolicited with sensitive personal information is in breach of the DPA UNLESS it's related to a CIFAS marker (credit industry fraud avoidance system - see below)

3 - Once you have credit with them they have no need whatsoever to do a periodical check.

4 - Your limit will usually only be modified according to internal behavioural scores, or company policy, or on request.


CIFAS markers are put in place if there are suggestions or indications you may be involved in or actively commiting fraud, or have been the victim. The markers differ and are specific, and you may not necessarily be told about them ever, depending on what kind it is. However if you are flagging up as a perp not a victim then the account would have been closed outright not cut in its limit, and you would expect that to be happening with your other credit outlets too - and anything new you applied for would probably be refused too.



Sounds to me like they're looking at all their middle-ground accounts i.e. those with safe and reasonable income but nothing special, but large exposure, and simply cropping the safe figures in order to justify sale of the bad debt book, and look better on the other side. So for example, we have £1bn owed to us and a potential of £2bn exposure. Bad debt is currently £100m. Therefore 10% of outright and 5% of possible. So crop back the potential to £1.2bn and it's a bigger percentage of the potential figure, which makes it a more justifiable proposition to shareholders then to sell the bad debt off at a loss to get shot of it. They then sell the bad debt book for around £65m, have a near 0% outstanding and limit the potential for bad debt to regenerate too quickly.

Chances are if you never use it, or clear the balance each month and pay no interest - and have behaved like this long term and throughout the economic downturn - that you make them next to nothing anyway so it's no big deal if you flounce to a competitor.

What they really want is customers who will start racking up that card to around £10-15k at which point if you appear to be spending it on day-to-day living they ride in like a knight in shining armour, move you to a fixed term unsecured loan, saving you £X per month yadda-yadda, so you either live within your means and become a more viable long term customer, or run up the small limit they let you keep once more and have 2 serviceable debts, one of which makes them extra on overlimit charges each month as a nice little side-bonus for them, but remains within their affordability calculations.

So in all likelihood the call centre monkey hadn't a clue and/or didn't understand the automated data trail left on the screens, and just fobbed you off. If you're REALLY keen, ask to speak with someone in the underwriting department, then ask to speak with a manager or team leader, explain you have a flawless credit report sat in front of you, and you didn't authorise them to check on you or the ref agency to share out information willy nilly, and so you'd appreciate an honest answer, even if it's just a simple company review of their exposure. You don't care, just want an honest answer... Should get something at least then. Most probably put through to complaints mind. Managers and team leaders don't like speaking to the unwashed masses. That's why they applied for those positions in the first place.

As for Moth's case, that's just automated behavioural scores doing periodical reviews. They see you maintain it well, and increase your potential, just in case one day you decide to buy a bloody great diamond ring for the mistress and stick it on the card. If you ask them to amend their system so that you are overlooked for automated increases, they should be able to do so. Certainly when I was a credit underwriter you could on what was a widely used system for card companies, and I wouldn't imagine recent updates would have engineered such things out as there's times they'd want to prevent them for their own purposes.

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im in ur monitrz, lickin ur screenz.

Beef- I'm almost positive that it was pre- April 2007 for the CCA 'get out' clause.

There are companies out there charging a fortune (credit issues may well be one ) who are charging a fortune to check the CCA (something you can do yourself).

A £14,500 credit limit thats dangerous very dangerous!! mines £3,500 and although i only use it for emergencys my monthly bill is still creeping up slowly

The number keys are close together on my laptop

Only dangerous if you don't control your spending

My other card has a £20k limit, neither have any debt on them

Official complaint raised with Lloyds today

You win, I feel inadequate now

You aren't wrong though. Even way back in the mists of time when my limit was about 12 shillings I never felt the need to max out my card.

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onli mrns Us txt spk

I max mine out all the time, simply because of any consumer protection I might get with it. I always pay it within the 50 odd day limit though.