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.

[Debsjs92]

I have had the same issue, it's dropped it twice now. First time initially was down 40, second time down 62. I've gone from 808 to 706.

[bristolian]

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@Debsjs92 wrote:

I have had the same issue, it's dropped it twice now. First time initially was down 40, second time down 62. I've gone from 808 to 706.

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Any "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.

[Crisyo]

Has it gone back up yet? This has just happened to me after renewing a phone contract with EE and taking a new internet package 😔 gone from 917 to 790 

[Jez2024]

Hi All,

I just been informed  by Clearscore that having taken out a  year sim only deal with EE has had a profound 'negative' effect on my credit score to the tune of 76 points 😳.

Its something that was  unexpected(Appreciate a hard search was conducted - but not affecting a score to that degree) , and in hindsight, had i have known would have caused me to 'RECONSIDER' said contract.

I have subsequently raised a case with Equifax, and will await the result

I appreciate 'Credit scoring' is purely a Guide, and is simply designed to help you understand what your credit report might mean to a lender 

 But as insignificant beings in a Universe we kind of take these things personally lol