Improve credit score and trying to understand debit

mickael28

Hello,

I just received my 1st experian credit report ever and I'm not quite sure about how I should do to do things the right way, for example, I have 3 doubts that I'd like to understand:

Q1. Would I score better if I ask for an overdraft, or if I ask for my credit limit to be increased?

Single Bank Account:
* Overdraft balance: £0
* Overdraft Limit: £0

Single Credit Card (set-up to be paid in full at the end of the month by Direct Debit):
* Credit Limit: £3300
* All Status Code: 0


Q2. Then I receive a negative factor:
"You have no successfully settled non-mail order accounts."

I read that this means I should go into debt by paying the minimum amount for like 6 months with a small amount and then pay in full on the 7th month.

Something I didn't understand here is, how's this debt reported in a report? I saw a section in the experian report talking about "an ambar status code for 1,2 or 3 payments late", does it mean that if I pay the minimum amount then that month will appear as ambar in my report indicating that I am 1 payment late (or that's different)?

Q3. So if I pay the minimum amount for 6 months, will each of those 6 months appear as me being 1 payment late?

Q4. Then I read a comment from @IrishGypsy:
"I re-built up my credit file years ago by spending £50 on a high APR card, repaid the minimum for 6 months (the avaerage time it takes to actually improve your credit file by any real margin) then cleared off in full in month 7. I then applied for a better rate card, (kept the crap one open but unused for another 6 months to keep the 1's adding up)"

Do you know what's the meaning of "keep the 1's adding up"? I was thinking that if you have paid everything in full, then you don't know anything so that should be reported with 'zeros' rather than 1's?

Many thanks in advance guys!

Professional

Q1: Yes to a point. The amount of credit available to you and overdrafts demonstrates that you are trusted by lenders. At the same time if your balance of unsecured lending is too high then it will be seen negatively.

Q2: This means you should lend an amount and pay it off. It will demonstrate that you can keep up with payments and pay it off in full.

Q3: No if you pay the minimum amount then you are still keeping up with payments. Late payments is when you do not pay your lenders on time.

Q4: 1's are for late payments - sometimes this can be seen positively by lenders as it means you are low risk but they can exploit you further because occassionally you may be late and they can make more money. This is a risky strategy and depending on your situation you should stick to safety and make your payments on time.

Hope that helps.

mickael28

Professional wrote: »

Q1: Yes to a point. The amount of credit available to you and overdrafts demonstrates that you are trusted by lenders. At the same time if your balance of unsecured lending is too high then it will be seen negatively.

Q2: This means you should lend an amount and pay it off. It will demonstrate that you can keep up with payments and pay it off in full.

Q3: No if you pay the minimum amount then you are still keeping up with payments. Late payments is when you do not pay your lenders on time.

Q4: 1's are for late payments - sometimes this can be seen positively by lenders as it means you are low risk but they can exploit you further because occassionally you may be late and they can make more money. This is a risky strategy and depending on your situation you should stick to safety and make your payments on time.

Hope that helps.

Understanding more, thank you!

Q1. What's the overdraft balance? The money you've used once your bank account reached zero?
Can I just go to my bank and ask to increase my overdraft limit, as it's currently zero?

Q2. How should I lend money to remove the negative factor in my report? ie, how's that it's not enough to borrow by using the credit card and then pay it all off in full at the end of the month (which is what I'm doing now)?

Q3. that makes more sense, thanks!

Q4. I didn't understand that strategy. Did you read the example they put? If you pay the minimum every month for 6 months and then everything in full on month 7th, how's that you're going to receive any number 1? Everything is clean in your account, isn't it?

Nins12345

I got a capital one card which was like 40% apr to rebuild my score I then brought all my food shopping for the month total around £300 and once I got paid I cleared the whole amount I did this for a year then got a barclaycard gold which is a much Lower apr and has 0%on balance transfers. My advice would be to you if you cn help it don't apply for an overdraft with your current account as might find yourself living in it and once you do this it's hard to get it of.

CLAPTON

there's not much wrong with your report

complete madness to make late payments as these will damage your credit rating

complete madness to pay interest on debt so pay in full


sensible to have a small overdraft limit in case you accidently spend more than is in the bank (but this depends upon the bank T&Cs)

get another credit card and use it like your current one; i.e. use regularly and pay in full each month

mickael28

Thanks guys, but do you know how can I remove that note from my report which says:

"You have no successfully settled non-mail order accounts."

I don't really know which steps I should follow...

CLAPTON

get a second credit card

mickael28

Many thanks, I'll do that and will check in a few months to see if things have changed.

Cheers!

cyanmorgan

..just a bit of advise, if you do have a credit card better be more cautious when it comes to purchasing especially thru online. Scammers loves to know a lot about their victims mostly credit card info.

mickael28

cyanmorgan wrote: »

..just a bit of advise, if you do have a credit card better be more cautious when it comes to purchasing especially thru online. Scammers loves to know a lot about their victims mostly credit card info.

I didn't understand, what did you mean by more cautious?