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Closing credit cards/reducing credit limits - an opposite view
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Chrysalis wrote:hmm whats callcredit?do they know what is deposited in people bank every month?do the public have access to callcredit reports on themselves?
ClarimanAuthor of the first Stoozing FAQ on the Internet and Creator of the SOA & Snowball calculators at Lemonfool.co.uk0 -
Chrysalis wrote:do they know what is deposited in people bank every month?QUOTE]
Your overdraft will show up on your credit report, if you've got an account that was opened after credit reporting took off, which I'm told is early 1990s. (ie. My main current account opened in 1984 doesn't show up, but my newly opened current account does with overdraft limit and o/d balance).Back on the DFW Wagon:
CC - £3,300 on 0% til 04/2020
CC - £4,500 on 0% til 02/2019
Loan - £12,063.84 as at 4/1/180 -
Good point Ali-OK, overdrafts will show.Author of the first Stoozing FAQ on the Internet and Creator of the SOA & Snowball calculators at Lemonfool.co.uk0
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interesting, on my credit report no such info shows up but of course the credit report they let public see probably not version they see. But I only checked experian and not callcredit.
Is this even legal? I dont remember giving my bank permission to give my bank balance to 3rd parties.0 -
Chrysalis wrote:...but of course the credit report they let public see probably not version they see.Is this even legal? I dont remember giving my bank permission to give my bank balance to 3rd parties.0
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Clariman wrote:As you can see there is a conflict between having a lower amount of "available credit" and minimising the "percentage used of credit", but it is all a question of balance I think.
Clariman
I know it's not an exact science but do you think it'd be better to have £10,000 available credit and only £2000 used (using 20% of available credit), rather than £5000 available credit but using £2000 of it (using 40% of available credit)...?0 -
David333 wrote:I know it's not an exact science but do you think it'd be better to have £10,000 available credit and only £2000 used (using 20% of available credit), rather than £5000 available credit but using £2000 of it (using 40% of available credit)...?
I think that the £2000 of used credit with £5000 available would be marginally better because the percentage utilisation of available credit is still low and the total available credit is also low. When looking at credit card utilisation, the lenders don't like to see someone maxed out in their usage which might suggest that they are struggling financially and, therefore, at more risk of defaulting. Having 40% used would not count as "maxed out" in my book.
Looking at it further (again this is "opinion") ... if someone was earning in excess of, say, £40,000 pa, then I think the £5K versus £10K available credit would be neither here nor there. Howeve, if their annual income was £14,000, then the advantage of only having £5K credit versus £10K might be more evident.
I hope that helps.
ClarimanAuthor of the first Stoozing FAQ on the Internet and Creator of the SOA & Snowball calculators at Lemonfool.co.uk0 -
ok but why are people with no current credit deemed as such high risk?0
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Chrysalis wrote:ok but why are people with no current credit deemed as such high risk?
Building a credit history can be a long drawn out business, sometimes taking several years to qualify for the better/best offers and high credit limits.
You can be on the electoral roll, have a landline telephone number, have a long employment record with your current employer, have a long banking relationship, and have lived at your current address for many years - but at the end of the day, your ability to prove you can manage/repay borrowings plays a very important part in a lenders decision to offer you credit.
It's a bit of a catch 22 situation, ie you can't get credit because you haven't had credit! That's why first time credit card applicants are generally advised to approach their own bank first, as they know how you handle your finances day-to-day.
This method is not without it's problems though, because a number of banks choose NOT to report positive account conduct to the CRA's. Instead, they'll only report negative information, ie late payments or defaults.
If your bank adopts the 'positive information' only approach, then this is where the 'credit-builder' cards come into their own. Yes they're high APR cards, but pay them off in full each month and you won't pay any interest.
More importantly, you'll hopefully start to assemble a stream of '0's on your credit history - making you more attractive to other card providers.0 -
but having a handful of credit cards with half used credit doesnt mean you can handle credit either. Their is some weird logic used by the credit card companies thats for sure.0
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