Trying to improve my credit

Emx

I did do a forum search, but didn't know what to put in. "improve", "credit", "statement" etc didn't turn up what I'd like to know. So I apologise if this is about somewhere.

I recently wanted to book a holiday, but the limit on my card wasn't high enough to book my hotel. I tried to increase it but no luck.

I figured I just wasn't spending regularly enough on my CC as I don't like to use it often in fear that I'll slip up. So for the last few months I've been buying a few things on my card each month and then paying it off immediately - that is, as soon as it shows up when I check online a day later or so.

However a friend recently brought to my attention that it won't help my credit unless I wait for a statement to come through with the balance on it before I pay it off. Is this correct?

Also, am I being cynical when I think that another reason they don't increase my limit is because I never pay them any interest? After all, CC's must be big business.

Thanks in advance.

lisyloo

There are many factors involved.
Your income, your available credit, your credit history, what % you are using etc.
It may be that you simply haven't built up enough history or your income is too low for morecredit.
We couldn't comment without more info.
But basically it's more complex with many factors taken into account.

Ralphy101

1) Is this the only line of credit available to you ? Do you have any other credit/store cards/ overdrafts?
2) What is your credit history like, any missed payements, ccj's etc?
3) How long have you had the said credit card?

Tixy

Your friend is right that to help give you a positive credit history you need to leave the balance until after the statement date and then pay it off straight after (still won't cost you anything in interest).

The problem will not be down to you not paying interest, many many people pay off their cards each month and never pay interest, the cc companies still make money from transaction fees from the shop everytime you buy something.

Emx

Ralphy101 wrote: »

1) Is this the only line of credit available to you ? Do you have any other credit/store cards/ overdrafts?
2) What is your credit history like, any missed payements, ccj's etc?
3) How long have you had the said credit card?

1: I had a second credit card which I cancelled a little while ago because I never used it - don't think I'd used it in about 2 years and it was the higher interest of the two. Both credit cards were/are with my own bank - Halifax. Can never get credit elsewhere it seems. I have a phone contract, and an overdraft which I don't use.
I do admit, I haven't checked my credit report in a while.

2: Never missed a payment or anything like that. This is why I believe it's mostly a lack of history - I don't use credit very often.

3: I think I must have had the card about 2 years now with a limit of £500.

I work full-time, about £12k a year, which I realise isn't much - but I have friends who work part-time with a bigger limit than me! Halifax again, funnily enough they pay the interest though...

I'd like to point out that at the moment, an increase isn't actually necessary - I'm not complaining as such that I didn't get one on this occasion - I'm mainly asking because I'd like to do whatever I can to make it possible in future when/if I really need it.

It was an annoyance not being able to book my hotel though, simply because you have to book with a CC despite the fact they don't take the payment immediately and I was gonna pay cash for the stay. Thank goodness for parents

Ralphy101

As Lisyloo put, the credit scoring malarky is a complex art. - You havent said how old you are, in my experience age can also be a factor.

You havent said how much overdraft is available to you, perhaps you have to much credit available vs your salary?

Personally, i would concentrate on buiding a good internal score with Halifax - Banks have a dirty secret in the fact that they score you based on your relationship with them - by purchasing small items and paying them off each month ( as you are doing ) will only serve you in good stead. - Thats why providing you have a good relationship with your bank ( not in overdraft debt etc.) its always handy to approach your bank first.

Give it 6 months doing this and then apply for a credit increase.

Given your salary, i'll think you will struggle in getting a "big" credit limit.

Emx

Sorry, I keep forgetting to be specific. I'm 21, my overdraft is £250. However up until last month it was £1750. Just before Xmas, Halifax increased it from £100 to that much, despite the fact I haven't used it since I was 16. They then lowered it to £250 after Xmas when they realised I still don't touch it. Seemed like a sneaky move to get me spending over the holidays if you ask me.

I wasn't looking for a huge increase at the time. The hotel was £660 - only £160 more than my limit. Hey ho.

Anyway, thanks for all the advice guys

Ralphy101

Like i said, just keep plugging away using it, paying it off... and they'll soon increase your credit, they'll be chucking it at you.