More than 1 credit card to build up credit history?

jfh7gwa

Some background
Look back at my posts you'll see that my problem has been that we mistakenly put my husband as the primary card holder/account holder of all things credit related, which means that I've got virtually 0 credit history in my name (despite being very good with money).

So thanks to the advice from others on this forum I got a Cap One card and am putting the weekly food shopping on it, paying it off a few weeks later once it registers on the statement - sorted! This is fine and is going well.

Questions
But... I keep seeing other mentions of building a credit score, and posters keep referring to using multiple cards for this purpose...?

For example, I've just finished reading a post where someone mentions they've got "all four" sub-prime cards (I think Cap One, Vanqish, and can't think what the other two providers would be).

1. Why would you do that? Does it look even better to have multiple providers reporting good credit history? Which is better - a year's cool payment with 1 card provider OR 6 months of cool payments with 2 providers? What is the relative quality rating for these repayment factors..?

2. Obviously I assume that applying for these cards have been spread out on their credit history, but what (if there is an advantage to using multiple cards that I'm not aware of...) kind of time spacing is advised? Personally, my credit score looks something like this...

< Sept 2011 - No credit that was in MY name primarily
Sept 2011 - Asked for an overdraft at the bank, declined
Sept 2011 - Attempted an MBNA cashback card, declined
Sept 2011 - Cap One card requested, granted, £500 limit

... so if I should be doing multiple cards to build my credit score, when should I next apply for my 2nd or 3rd one?

Thanks for any info on the two Qs above, folks

chanz4

get a jd williams and very account, you dont have to order from them to get it reported to cras although jd closes it if not used for 6 months. Best of all very easy to get

Venusflytrap

Any type of positive credit history is a good thing - whether with one card + utility payments + mob OR 3 CCs + bank ODs etc.

I currently have 3 CCs which are all for very different purposes: one is for nectar rewards, the other for fee free foreign purchases and cash withdrawals and the last for future BT offers. The fourth CC is on it's way and this one offers 0% on purchases and percentage earnings towards fee-free foreign spend based on UK spends.

I pay my CC bills in full each month and have done for years. This has built up a stable credit profile for me. Also a stable address, job and having ODs which are hardly ever used all contribute to the overall picture.

If you know what benefits you're getting CCs for and can manage your finances without getting into debt then having 2 or 3 doesn't matter.

bengalknights

Personally when i started off it was with a mobile phone contract and one credit card after a year the report started building up and i started receiving promotions of everyone.

BobQ

Credit scoring is a bizarre industry. A friend of mine who did not have any credit and simply lived within their means using a debit card building up significant cash savings was turned down for a 60% mortgage due to the lack of a good credit history. She was advised by the mortgage firm's FA to apply for a credit card, use it for six months always paying more than the minimum but less than the balance and demonstrate she could cope with debt. Then apply again.

This just demonstrates to me how corrupt the financial services industry is that it prefers people who can manage debt rather than those who can live within their means.

chexum

jfh7gwa wrote: »

But... I keep seeing other mentions of building a credit score, and posters keep referring to using multiple cards for this purpose...?

For example, I've just finished reading a post where someone mentions they've got "all four" sub-prime cards (I think Cap One, Vanqish, and can't think what the other two providers would be).

1. Why would you do that? ....
2. ... what kind of time spacing is advised?

The other two must be Aqua and Barclaycard Initial, as any regular sub-primer would know by heart :beer:

As for why - first, it must be told that no financial institution publishes their scoring criteria, so we all work by breadcrumbs left by them along the way. One is that the better you manage a given type of account, the easier you'll get it - hence by using (actually using!) credit cards, you'll show you are a low risk for those.

If you use more type of credits, you'll have better chances of going above the thresholds for other types as well. I.e. if you have several cards, a contract mobile, a store credit line, you could get better APR on a comparable loan.

As for the timing (but it explains the why too), have a look at:

http://www.moneysavingexpert.com/loans/credit-rating-credit-score#checker

One of the questions is how many of your accounts have been opened in the last 18 months, another is how many applications you made in the past 6 months. It's generally accepted that up to 3 applications in 6 months won't affect your rating significantly, but it can start to cause problems afterwards. That should mean, an application every 2-3 months should not be a problem for the outcome of future ones.

If you're accepted though, it's different, you'll likely hit a roadblock in a year, and even if you're accepted, you might get a significantly worse APR than advertised one for example. After 18 months of having several cards open, you're golden. Note though it's not clear if this 18 months is for credit cards only or all types of credit.

So one of the points is that if you've gotten "all four" this year, and be very-very careful with the payments (and if you didn't have serious problems before, like an actual default) by mid-2013, you could replace at least two of the sub-primes with a then current best cards, and never mind if the one you got becomes a dud.

(I.e. you could have thought Santander's 123 is good for 3% petrol cashback, even though it has an annual fee, but a few months later AA comes out with a 3% one and no annual fee - you could then switch to that without a hitch.)

Chasing deals can become quite a hobby - but is it worth the time?

jfh7gwa

BobQ wrote: »

This just demonstrates to me how corrupt the financial services industry is that it prefers people who can manage debt rather than those who can live within their means.

I have to admit I do view this as quite topsey turvey... like Alice in Wonderland. I'm not particularly amazing with cash, but I know about financial management well enough to live within my means, never done anything terrible in terms of finances, and it does seem funny that I have friends who have been utterly irresponsible with their money (think whilst a student - typical mistakes but mistakes all the same), much more so than me... and I am the one who can't get a measly £100 increase in my bank overdraft, simply because I never use the credit facilities potentially open to me.. and the 1 or 2 that we as a couple have used, have always been in my husband's name...

Never mind - I've smartened up - thanks to some online reading, lots of help from MSErs - i'm happy to play their game if that's what it takes! :T