Paying off a Credit Card

shandy1

Hi. I have a credit card which has a £1000 limit and owe just under £500 on. I'm selling my car this week (on eBay and it ends Sunday) hopefully for around £1200.
With the money I'm going to pay off my cc fully and reduce my overdraft ( Its £1300, usually gets to about -£1100 before i'm paid).

Will this improve my credit rating? I haven't got a bad one. I've paid off a 2 year loan of £4000 without any problems last year. It's just that I moved to a new flat last september (renting) and even though I've applied and sent off the form, I don't think I am on the electoral role.

The reason I'm asking this is I want to apply for a new loan to buy a car in a months time (£3-4000) and not sure if I will get rejected or not.
Hope you can help! :T

MFWannabe

You need to make sure you are on the electoral register; as lenders don't like it if you're not
Also i woule say you need to clear your overdraft and have at least a few months of not using your overdraft before applying for a loan; lenders will get wary of someone who is always in their overdraft

izools

Although having said that only the current months overdraft balance is reported (if atall) - overdraft balance history isn't recorded like a lot of credit card balances are these days, so one month not using it will do fine

Have you called the local authority to check whether they're adding you to the electoral role?

shandy1

I will check tomorrow morning. Who is it I contact? The council? I live in edinburgh. So would I be better off clearing my overdraft before my cc?

dmliverpool

Are you in a situation where you can afford a new car. Get the debt paid and then get a new car, or even better pay for the car on the card, this will give you a better way of repaying the car debt.

This economy isn't the best place to be buying a car on finance. I did two years ago and regret it. Alternatively get a banger and pay off your card debt then use the banger as a deposit on a finance car. That way you will gain another years no claims for cheaper insurance costs making your new car cheaper to run.

Remember what your mum or dad said once... I want NEVER gets!! Well it does but your going to pay at least £1000 more doing it your way, no matter what credit you have.

shandy1

Well I could afford monthly payments of around £100 if i did get a loan. That was why I wanted to clear my cc and some of my o/d or vice verca with the money I get for my car.
I think I would have a better chance of getting a loan this way, plus also have my overdraft to go in to some months if I overspent.

I have considered a car for under a £1000 and have been looking on the internet. This would be a good option if I could find one with a years MOT, taxed and a decent service history. I have 10 years no claims so another year really isn't going to reduce the cost by much.

I just dont want to apply for a loan and get rejected and have it on my credit file.
My credit cards limit is only a £1000 with only around £490 left on it so I wouldn't be able to get a decent car for that price anyway. Or can I ask for a higher limit for the card? its an air miles duo. 15.9% APR i think....

book12

shandy1 wrote: »

I will check tomorrow morning. Who is it I contact? The council? I live in edinburgh. So would I be better off clearing my overdraft before my cc?

Contact your local council to register on the voters roll.