Does unused credit go against you?

delirious

Some years ago I made some mistakes with credit and ended up with several defaults to my name (though no CCJ's). Now that they have all but one dropped off my credit report, I have been working at building my credit rating and have been doing well. I currently have the following:

Capital One Credit Card: £200 limit, £180 Balance
Vanquis Credit Card: £1500 limit, £1400 Balance
Littlewoods Account: £1200 limit, £640 Balance

The littlewoods account and vanquis card have been used to buy some bits and bobs for our new house when we moved and are being paid off at above minimum payments. The Capital One card gets used monthly for petrol then paid off each month.

I have just applied for an Aqua Credit Card and been successful but don't know the credit limit and a Very account and got a £1000 credit limit.

I have also recently got a mortgage with a local building society.

What I'd like to know (and I know this has probably been asked before) is, if the Aqua Credit Card and Very Account remain unused, will having them affect my chances of getting a credit card from a better lender in the future?

bouncydog1

Have you applied for the new card to transfer the balance from the Vanquis card, which is almost at it's limit? If not, what are you going to do with the new card? Hopefully not add to your debt! Littlewoods and Very charge horrendous interest rates so again unless you are using 0% options and monitoring them very closely to ensure no interest is charged,I would close them straight away.

Lenders take lots of different factors into account - however it is generally thought that too much credit to income ratio will hamper chances of getting a new card because you could just spend all available and not be able to service the debt.

bigadaj

Use your cards but pay off in full every month, don't carry a balance as you are paying a fortune.

delirious

Thanks for the replies.

Everything purchased on Littlewoods has been purchased using the 0% options and I will be paying vanquis off at £100 over minimum payment from next month. The Aqua card wasn't intended to do a balance transfer and that's why I'm wondering whether to close the account as soon as the card arrives.

Reason I opened the Very account is because it's the same company as Littlewoods, same products are considerably cheaper, and they encourage you to pay things off within 3 months (if you pay off in 3 months you pay no interest), so I'm hoping that will eventually replace my Littlewoods account.

Still doesn't really answer my initial question though

ankspon

Is it true if you pay off your credit card balance before you get the bill it can have a negative effect

somethingcorporate

I don't think it does. I have no idea why it would go against you.

pheonixrising21

ankspon wrote: »

Is it true if you pay off your credit card balance before you get the bill it can have a negative effect

If you pay before the bill comes, how do you know what you owe?

I'm of the impression (from experience) if you pay before you get the bill, the payment counts towards the previous statement not the new one.

That means that you run the risk of not paying enough to cover the statement total/minimum payment or end up not paying anything for that month because you believe you have already paid it!!

bouncydog1

If you pay the bill before the statement is issued then as Phoenix states, that counts towards the previous statement. If you don't make a payment when the statement is issued then the account goes into arrears and will be marked as such, running the risk of a charge and withdrawal of any promotional rates.

Better to set up a DD for the minimum so that you always make a payment on the statement due date.

ankspon

It is paid online,so if i check my statement the total is there before any bill is issued,it is normally paid 2/3 days after a purchase as i only use the card for added purchase protection.

CLAPTON

ankspon wrote: »

It is paid online,so if i check my statement the total is there before any bill is issued,it is normally paid 2/3 days after a purchase as i only use the card for added purchase protection.

why do you do that?

the reason it's often said that it's a bad idea is that your balance will probably show on credit reports as zero (because on the statement day your balnce will usually be zero)

this looks as if the card isn't being used... no bad effects on the credit files but it has no good effect either (i.e. it does not show as a well managed a/c)

ankspon

I was told recently that paying a bill before the bill date did not boost your credit file so now i know i will wait,thanks.