Credit score

waterwatcher

I've just checked my credit score with experian ..... it was very good:j
It says the thing that goes against me is 'You have several credit agreements (excluding mortgages), and the outstanding balance is high'

How many credit agreements would be appropriate to have and what is deemed an acceptable outstanding balance? Any ideas would be greatly recieved!

Thanks in advance.

DarkConvict

Every creditor scores you differently so it will totally depend on them.

However the important bit is usually the amount of credit in use, the amount of total credit available. Say you have £7000 of debt, and have 4 cards with £2000 limit each, there is £1000 available still out of a total £8000.
But also they like to compare your salary to your available credit to ensure they do not over lend to you putting you in a position where you cannot pay.

waterwatcher

So its in my interest to lower my limits then? I've a card with a £4500 limit but a balance of £300. I've kept the limit for emergencies but hopefully I wont encounter an emergency that would cost that much. Might have a think about reducing that then!
Thanks

DarkConvict

Yep, there is a risk in that if you have lots of credit but not using it.

Say you have £20,000 available on cards already but only using £300 off it.

It would be risky to lend you more money as you already have so much available as you would therocially by the end of the day have spent £19700 on credit.

It is a balancing act. Personally i just have 1 CC with a limit of ~£3000 and spend on it as needed but pay off in full every month. It gives me a good but not excellent score. Excellent scores come from years of credit use without missing payments. It can help your score if you make min payments as banks earn money off you but personally its not worth it overall, always make full payments.