Unsecured loan - credit score dropped

[Cacla132]

Hello,

I didn't realise that getting a new handset on contract would show on my credit file as an 'unsecured loan'. It's caused my credit score to drop by 70 points and go from excellent to good. This will potentially cause big problems as I need to apply for a mortgage soon. Is there anything I can do to rectify this? Is it possible to pay it off and close the account? Im outside the cooling off period before I noticed unfortunately. 

[bristolian]

The term "credit score" is largely meaningless outside the marketing departments of certain CRA's who are wanting to sell you additional products. You have a statutory credit file that records your payments history and searches, and then individual lenders score you internally against their own criteria.

From when I migrated to FlexPay in late-2023, you are advised of a credit search as part of the process.

[Chris_B]

@Cacla132  Even paying it off now it'll still will show  your credit report for around 3 months.   

[Cacla132]

I remember I was warned that a credit search would be done and I had no issue with that but I don't think it was clear that this would show as an unsecured loan.

[BrendonH]

As long you don't miss any payments you will be fine.

My credit score was only 'Good' when I was accepted for my mortgage back in 2020. 

[Cacla132]

Thanks for the reply, that's reassuring.