Pay full ammt each month or leave a little on card-best for credit-file improvement?

DEBTMONKEY1A

Hi guys/gals,

Just been approved for Aqua & Vanquis (cap 1 STILL no decision-'further checks'-that was a week ago-guy on phone this sat said 'approved' but I will be notified if 'decision overturned'(??!) -said no 100% decision yet)....

Applied for probably too many cards in a short space of time as Mycreditfile rating was 656 & not Experian say 540 (!!!-very poor). No adverse at all/missed payments/electoral roll for 1 1/2 yrs, 4yr+ current address.... no linked address...nice green 'zeros' since August for full bank a/c (no o/d) & cashplus creditbuilder....

Was thinking of using both cards for food/petrol & pay off in full by DD monthly....or am I better to set up a standing order & pay say 3/4 of balance every month? Any ideas?

Certainly not planning on applying for anything else for a minimum of 6 months (Experians score said if all payments on accounts up to date for 6 months score will be 995!(.

Any ideas guys?

dzug1

Paying less than the full amount each month is guaranteed to maximise your interest charges

jonesMUFCforever

The credit card companies will love you !
Remember that they will charge you interest on the whole amount for the first month and residual interest thereafter.

It will not do anything for your credit score unfortunately.

izools

It is not necessary to pay less than the full statement balance to improve your credit rating.

All that is necessary is to pay more than the minimum and keep the balance well within the limit.

What is necessary is to maintain the status quo - keep accounts open as long as possible and don't open new accounts just because you can - this hurts your credit score. Having held one credit card, one bank account, and one mobile contract for ~18 months will yield a much better credit score than having opened a variety of credit accounts especially if some have only been open a few months.

Clear in full :beer:

Oh, and ignore that Experian score crap. My rat will produce a more accurate representation of how a creditor rates you via the wonder of formation crouching. And they charge half what Experian do

You won't be remotely appealing to creditors unless you've missed no payments for at least a whole year, haven't opened any new accounts in the last 6-9 months, haven't applied for a new account in the last three months or so, and haven't any outstanding defaults, and any satisfied defaults you have are over three years old.

Even then the decision a creditor makes when you apply will rely just as heavily on your circumstances as it will the data on your credit file.

bengalknights

Pay it in full as you will only pay more interest with no benefit to you.The credit score will just show the balance as current and paid.

ViolaLass

izools wrote: »

All that is necessary is to ...keep the balance well within the limit.

Really? If you pay it off in full each month, why would it matter if you got close to your limit? (provided you didn't go over it)

DEBTMONKEY1A

Thanks guys/gals!

izools

ViolaLass wrote: »

Really? If you pay it off in full each month, why would it matter if you got close to your limit? (provided you didn't go over it)

It depends at which point in the month the credit card company report the balance. If your balance history consistently reads a very high proportion of the limit this can still affect your credit score.

Realistically speaking it shouldn't but not all credit card companies report how much you've paid back each month, and given that, it is fair to assume that not all credit scoring models notice how much you've paid back each month if you do hold your card with a company that reports the repayment amount.

Balances that are frequently reported as close to the limit give the impression to prospective creditors that you are using credit purely because it's there - those that frequently have high balances are known to use further credit the moment their limit is increased and get themselves into trouble.

It is the few and far between who can repay a card in full each month that is riding it's limit without being frivolous with their spending.

NeverInDebt

CatalinaMadnickh :spam: merchant bumping up post count to spam