Help! Credit Card damaged my credit rating

unborn_chicken

Hi all!

I recently was accepted for a Capital one credit card, I got this out with the intention of rebuilding my credit rating. I bought some train tickets for £50, paid it off within a few days and my credit rating has gone from 'fair' to 'poor'!!!

I'm intending to apply for a CDL at some point and I wanted to have a good credit history to improve chances of being accepted. I really don't know what to do...should I just cancel my card?

Credit expert says my score has gone down because my lending has increased.

Any ideas!?!

Thanks!

Tixy

Scores/ratings really are not important. Its the actual data on your credit report that potential lenders will see.

Now you have the card the best way to use it to build up your credit history is to buy 1 or 2 things a month and repay in full after the monthly statement has been generated (and before the due date).
If you pay before the statement is generated it won't help improve your history.

unborn_chicken

Hi Tixy,

Thank you for your advice. I'm a bit gutted as it was (slowly) getting better!

I'm wondering if it will actually improve on what it was if I do what you say, and pay it once the statement has come through?

Or would it just be a better idea to cancel?

I'm guessing I should see it through.
x
xxx

BoGoF

Why are you gutted about a Credit Reference Agency 'downgrading' you. Do they lend money?........No. Do they try and sell their 'scores' to unsuspecting customers.....yes.

unborn_chicken

Dear Bogof

As mentioned in my previous post, I'm going to apply for a CDL in the near future, so having a good credit rating is important to me

Best wishes

jen245

Youve only just taken the card out, you need to use it for at least 12 months before it has a positive impact on your credit worthiness. Put your normal monthly spends on it, then pay off in full when you get the bill.

chanz4

You have to walk before you can run, yes scores do go down when you first open an account.

r1chscott

Your credit score will always look worse shortly after applying for credit as it means there has been activity on the account, when that activity is deemed to be negative (as in asking for money) then the score goes down. It will normalise after a few months so there's no need to panic.

Whilst the score in itself means nothing it is an easy indicator of how your report could be viewed, but again that will depend on the company looking at it as they all have different criteria.

The best way to improve your chances of getting credit in the future is to do as Tixy advises: use the card and then pay it off in full each month (Preferably by DD so there's no chance of forgetting!) This will make your credit report more positive as it will show you managing your money properly.

blacksta

Another one of those thread, where Credit Agencies scores dont mean much unless they start lending

izools

Also the presence of a new account always has a negative effect. Any accounts under six months old are considered new and negatively effect credit ratings because they haven't been open long enough for prospective new creditors to see how the debtor will handle said account.

Also opening more than one account in a six month period can be interpreted as debt stress - desparation for credit.

Once the account has been open for over six months, as long as there have been no new applications for credit in the mean time, it will have a positive effect, if run properly and kept with a balance of below 50% the limit.

unborn_chicken

Hi all

Thanks to everyone who wrote helpful advice!!!