Repairing my credit - newbie!

zudecke

Hi guys!

I'm in a quest to repair my bad credit following a default on my £250 student credit 2 years ago.

According to my Equifax credit report - that's the only thing bringing my score down - but at the moment I don't have any direct debits or credit/store cards etc.

So now I'm moving banks, from Natwest to Alliance and Leicester, going for the Premier Direct Account (if they accept me) and taking other steps to help improve my score, like getting out a CC designed to help one rebuild their credit. Can you guys tell me:

• If this actually works?
• How best to do it? I.e. buy something with the card and pay it off before month end???on the process of rebuilding credit?I purchase and repay have any impact
• Does the amounts
• Which one to choose from below (or do you have other better suggestions?):
  • Was thinking of the Vanquis CC at 39.9% APR
  • Or, the Barclay Card Initial Credit Card at 27.9% APR.
  • (Sorry, it won't let me post links...)

Also, should I set up a direct debit with my mobile phone company? Never wanted to, but I guess they win lol! Will this really help?

Thanks guys!

Any other tips also appreciated!

Look forward to your replies,

Zudecke.

Tixy

Hi

Yes having a 'bad' credit card will help. Spend on it each month but always pay the bill in full. This shows you can handle credit responsibly. Some people choose to buy their petrol each month or something for example.
In theory the APR doesn't matter as you are always going to pay it off (set up a DD to pay the balance in full so you don't get tripped up)

Does you new account have an overdraft?

Do you have a contract phone? does this appear on your credit report? if so do you always pay on time? if so then a DD will make no difference.

Good luck

zudecke

Hi,

Thanks for your reply.

So, the amount I'm putting on the card and paying off is irrelevant? I.e. I was thinking of doing online shopping with it, then having a direct debit set up to pay off the balance at the end of each month - but my Q is... Does spending (and repaying) bigger on the CC help me credit to get better quicker or is the amount irrelevant?

My existing 2 accounts do have OD's. My student one is maxxed at 1350 and my current plus is 500.

I haven't even applied for Alliance & Leicester one yet, but when I do, I will want an OD of about 200 - is that wise?

My phone is a contract phone - I just choose to pay it manually each month rather than have a DD set up - and no, often I don't pay my phone bill on time and get cut-off temporarily until I do - but these late payments never show up on my credit report - in fact my O2 credit profile on Equifax is all okay.... I phoned Equifax to query this and to ask if this may be having a negative effect and she just said she knows as much as we can see on my profile - i.e. I haven't been penalised for my many late payments to O2 according to Equifax profile...

Thanks again and look forward to your replies!

Zudecke

Tixy

Just to double check - have you looked at experian to see that the late phone payments aren't showing there.

The amount you spend shouldn't make a difference as to how much your report improves. Ideally use it most months and for more than just a pound or 2, I saw someone recommend a spend of at least £30 per month which seems reasonable.

zudecke

Okay - and between the Initial Barclaycard and the Vanquis card - shall I just pick one with the better interest rate? I know it's irrelevant as I will never plan to go over, but surely it would be logical to get the better priced one?

And yeah, I've checked Experian as well and nothing there either. I'm thinking maybe CallCredit or whatever its called maybe?

Tixy

You could double check callcredit to be certain but it is the least used of the agencies.

As to the cards - yes go for the lowest APR anyway I'd say (of course you have no plans to pay interest but on the off chance you may as well minimise the theoretical interest!)

zudecke

Cheers Tixy .

So does anyone have any tips of the best "credit building" credit card out there? If there is even a difference other than APR lol..