blog.matt.rogow.ski

How your credit score works

The game that has no rules

Date
Friday 27th December 2019
Word count
360
Read time
2 mins

Me: Hi! I'd like to apply for a credit card please. I have a few already but I'd like this one too.

Creditors: Sure! Let me just check that for you.

Creditors: Looks like we can offer you a £5,000 limit!

Me: Great, thanks!

Creditors: Here's your card :)

Me: I think I'll spend around £3,000 on thi-

Creditors: Why would you do that?

Me: What?

Creditors: Don't do that.

Me: Why?

Creditors: Doing that will affect your credit score.

Me: Why would using credit I've been given affect my credit score?

Creditors: Because your utilisation ratio would be too high.

Me: Uh, okay. So should I apply for more credit to help the ratio come down?

Creditors: Don't do that.

Me: But you said-

Creditors: Doing that will affect your credit score.

Me: Why?

Creditors: Because then you'll have too much unused credit.

Me: Right... I'll only spend a small amount on this card then.

Creditors: Don't do that.

Me: Seriousl-

Creditors: Doing that will affect your credit score.

Me: Why?!

Creditors: Because then you'll have too much unused credit.

Me: Okay, I'll cancel my other cards, and spend the same as I used to on those on this one.

Creditors: Don't do that.

Me: Fu-

Creditors: Doing that will affect your credit score.

Me: I can't wait to hear why.

Creditors: Because then you'll have a low overall credit limit.

Me: So, can I get this straight?

Creditors: Sure!

Me: If I have a low credit limit, that's bad?

Creditors: Yes.

Me: If I have a high credit limit, that's bad?

Creditors: Yes.

Me: If I have low credit utilisation, that's bad?

Creditors: Yes

Me: If I have high credit utilisation, that's bad?

Creditors: Yes

Me: Is there any way of knowing the actual rules to satisfy your requirements?

Creditors: No.

Me: Even though this literally impacts what I can and can't borrow in the future and could affect my ability to get a loan or a mortgage?

Creditors: Yes.

Me: No clear information at all?

Creditors: No.

Me: So we just have to guess and hope for the best?

Creditors: Yes :)

Me: ...

Creditors: :)

Me: ...

Creditors: Would you like this credit limit increase?

Me: -_- Sure.