Best way to rebuild credit score
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Pay off IN FULL on time, each and every month. (preferably with a DD so even if life gets in the way, it's never missed)
Other than avoiding paying interest which depending on the lender may not be desirable if spotted on a credit history, what is the effect of paying the full balance?0 -
Other than avoiding paying interest which depending on the lender may not be desirable if spotted on a credit history, what is the effect of paying the full balance?
It would demonstrate that the OP is responsible with their lending facilities.
They borrow, they pay it back.
This will show they are a minimal risk for future lenders...mortgage, loan, credit card with rewards. I would think the OP would like to pick a lender and best deal, rather than be restricted with their choices.
Noddle CR also reports, among other things, statement balance and payment amount.I’m a Forum Ambassador and I support the Forum Team on the Budgeting & Bank Accounts, Credit Cards, Credit File & Ratings and Energy boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
If you can't be the best -
Just be better than you were yesterday.0 -
It would demonstrate that the OP is responsible with their lending facilities.
They borrow, they pay it back.
This will show they are a minimal risk for future lenders...mortgage, loan, credit card with rewards. I would think the OP would like to pick a lender and best deal, rather than be restricted with their choices.
Noddle CR also reports, among other things, statement balance and payment amount.
Ouch! What we will have in that case is "rolling credit" which depending on the lender may be frowned upon in both credit cards and overdraft. Certainly it will be highlighted by Clearscore.
i.e. we spend going near the limit, we pay it back and then spend near to the limit again and then pay it off again and so on. Sometimes in an overdraft it's referred to as a "perpetual overdraft". What it shows is that the credit is needed for everyday expenses, income is not enough and likely to default if other demands on income arise.
Much better for a credit history to show a balance which is then gradually reduced and fully paid over the short to medium term. The problem here is high interest cards but high interest can be reduced by keeping the average balance low.0 -
Much better for a credit history to show a balance which is then gradually reduced and fully paid over the short to medium term. The problem here is high interest cards but high interest can be reduced by keeping the average balance low.
My thought process would be that this is then not being used as rolling credit, ie borrow, pay back but as living beyond your means because you haven't/couldn't pay it all back.
It's pretty standard to have no interest if paid in full on a CC (obviously a few exceptions to the rule out there), not the case with other forms such as most OD's (the most expensive way to borrow, obviously again a few exception out there for these depending on the acc type). CC's used as a budgeting tool is good.
I think we going to have to agree to disagree I’m a Forum Ambassador and I support the Forum Team on the Budgeting & Bank Accounts, Credit Cards, Credit File & Ratings and Energy boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
If you can't be the best -
Just be better than you were yesterday.0 -
My thought process would be that this is then not being used as rolling credit, ie borrow, pay back but as living beyond your means because you haven't/couldn't pay it all back.
It's pretty standard to have no interest if paid in full on a CC (obviously a few exceptions to the rule out there), not the case with other forms such as most OD's (the most expensive way to borrow, obviously again a few exception out there for these depending on the acc type). CC's used as a budgeting tool is good.
I think we going to have to agree to disagree
Of course it's rolling credit.
It depends on the card and the lender but I would hazard a guess that 100% of lenders without exception are out to make a profit from interest. The biggest question is whether they like us not allowing them their profit.0 -
Ouch! What we will have in that case is "rolling credit" which depending on the lender may be frowned upon in both credit cards and overdraft. Certainly it will be highlighted by Clearscore.
i.e. we spend going near the limit, we pay it back and then spend near to the limit again and then pay it off again and so on. Sometimes in an overdraft it's referred to as a "perpetual overdraft". What it shows is that the credit is needed for everyday expenses, income is not enough and likely to default if other demands on income arise.
Much better for a credit history to show a balance which is then gradually reduced and fully paid over the short to medium term. The problem here is high interest cards but high interest can be reduced by keeping the average balance low.
Can you provide any evidence that paying unnecessary interest on a credit card improves your credit history?
it seems daft to pay interest when you don't need to? I might just as well drop fivers down the grid outside my house!
I always make minimum payments during 0% promotions, otherwise I pay balances in full, or BT to another 0% card, thereby not paying any interest.
Never seen any adverse effect on my credit file from doing this, and it hasn't affected my ability to obtain further credit.0 -
Superscrooge wrote: »Can you provide any evidence that paying unnecessary interest on a credit card improves your credit history?
it seems daft to pay interest when you don't need to? I might just as well drop fivers down the grid outside my house!
I always make minimum payments during 0% promotions, otherwise I pay balances in full, or BT to another 0% card, thereby not paying any interest.
Never seen any adverse effect on my credit file from doing this, and it hasn't affected my ability to obtain further credit.
You haven't dropped fivers down the grid? Can you provide any evidence that paying the full amount improves a credit history? Don't you trust what Martin and MSE says then? (Read back.)0 -
I haven't dropped fivers down the grid. I don't waste money!
Neither have I been daft enough to pay interest to credit card companies when I can afford to pay the balance in full.0 -
I don't think either method affects ones credit file adversely. I think they're both beneficial means to keep your credit history in the green. It could be argued that it is however safer to pay the balance in full each month, so as to keep on top of things.You haven't dropped fivers down the grid? Can you provide any evidence that paying the full amount improves a credit history? Don't you trust what Martin and MSE says then? (Read back.)0 -
I don't think either method affects ones credit file adversely. I think they're both beneficial means to keep your credit history in the green. It could be argued that it is however safer to pay the balance in full each month, so as to keep on top of things.
Ok let's consider another angle, that of the minimum payment marker: It's said on MSE and elsewhere to avoid the minimum payment marker and various objections to it are posted.
Ok if we pay more than the minimum payment we don't get the minimum payment marker. But equally if we completely miss the payment and don't pay anything at all we don't get the minimum payment marker.
The absence of the minimum payment marker creates doubt in the lender which could be so great as to have an application referred so that a real person can have a look at the account history.
On the other hand the minimum payment marker shows that we have paid the minimum payment and we are keeping to the terms of the agreement. So the minimum payment marker actually improves a credit history.
So now that's two fallacies, paying off the full balance and avoiding the minimum payment marker.
marker is the new MSE word of the moment.0
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