Debt-free by Summer 2014! What's the best approach with my 'credit'

Miss_Fox_2

Hi guys!

So, I've put all my plans in place from pay day next week until June 2014 to clear my £6200 debts, but I am wondering what the best approach is with my credit?

Once I've cleared my debts, am I best keeping open these lines of credit or am I best closing them all together?

A colleague suggested by keeping them (and perhaps giving them to my Step Mum so I don't use!) it'd look good on my credit rating in that my balance is £0 but the credit limit is £X amount, plus I'd at least have them for emergency.

What are your thoughts?

Liz

Miss_Fox_2

Anyone?

System

Miss_Fox wrote: »

Hi guys!

So, I've put all my plans in place from pay day next week until June 2014 to clear my £6200 debts, but I am wondering what the best approach is with my credit?

Once I've cleared my debts, am I best keeping open these lines of credit or am I best closing them all together?

A colleague suggested by keeping them (and perhaps giving them to my Step Mum so I don't use!) it'd look good on my credit rating in that my balance is £0 but the credit limit is £X amount, plus I'd at least have them for emergency.

What are your thoughts?

Liz

Hello,

Once you've cleared your debt I would close all but one card account down and reduce the limit to something manageable. Spend a bit on it each month (even £1 would be ok!) and pay off in full each month. This will then build up your credit rating. I'm not sure that just having access to credit without using it actually builds credit rating.

Good luck!

Red.

camuk81

Liz, I been told conflicting advice but having done Martin Lewis credit rating the best advice I can give is stick with one with a low credit rating spend a little and pay off the whole amount before the due date.

Any lines other lines of credit close a few months after clearing.

The only reason I can give for my above actions is:

1. Closing everything as soon as its paid off apparently looks bad to a lender and I can kind of see the reason.

2. Spending a little on a small line of credit shows you can manage credit. Wait till the statement is produced and then clear on or before the due date.

£. Not closing credit down shows you have 6k worth of credit. You can't give it someone else so best take away the temptation plus why would a lender lend another 4k worth of money if you already have 6k you aren't using. The computer that makes the decision with assume you have a possible 10k to go on a shopping splurge (even though we know you won't) and decline you.

Computer says no!

Tixy

Yep agree with others

Once all your debts are paid off then keep one card open (preferably one that doesn't have any missed payments, and definitely not an account that has a default registered).

Then use that account each month and pay off in full the following month. That will help you maintain an ongoing active credit history.

Miss_Spendalot_2

Miss_Fox wrote: »

Hi guys!


A colleague suggested by keeping them (and perhaps giving them to my Step Mum so I don't use!)

What are your thoughts?

Liz

After reading some of the posts on here I would definitely say DO NOT GIVE YOUR CARDS TO ANYBODY whether it is Mum, Dad, Brother, Sister, Uncle Aunt Etc.

Better to just take the advice given to you above..

Good Luck...

Miss_Fox_2

Thanks everyone (slightly delayed response, I know!) x