Credit Cards for improving Credit Score

1940sGal

First, I've never had a credit card so I have no idea how they work (ok I have a vague idea but I don't know what types there are).

I've just been on Experian and got my credit score, which is classed as 'fair' (which is better than I expected to be honest). I see no flags or major worries. Mainly my biggest is my £1500 student overdraft but now I'm working that will eventually be sorted.

Anyway now I am working I can work to improve my credit score. I'm assuming one of the best ways to do this is via a credit card. But which one would be best for someone with a 'fair' credit score looking to improve it?

Also, if I get a new phone on contract, will that effect things? And will making regular payments in to an ISA also have any effect?

Many thanks as always for help.

BugsyBrowne

Ask your bank for credit card.

Having savings doesn't improve your credit rating it just makes the banks richer.

Blue_Max

Couple of credit cards for improving credit rating are:

1. Aqua Credit Card. Gives you 3% cashback on purchases made.
Credit limit is comparitively low at a maximum of £500.
Never use for borrowing as the interest can be as high as 45%.
So pay back in full on the payment due date by setting up a Direct Debit.

2. "The Luma Credit Card gives 0% until January 2013 on new purchases, and accepts people with CCJs or defaults in their past. After the 0% rate ends, it's 35.9% representative APR, so ensure you've repaid in full or switch to a suitable Balance Transfer card."

There may be others that suit you better. Visit
http://www.moneysavingexpert.com/cards/
and
http://www.moneysavingexpert.com/cards/bad-credit-credit-cards#rebuild

Sheriffsam

On a simialr subject, are there any cards that are good for transfering balances if your score isnt great? mine shows as fair and i doubt i'll be eligable for a 0%, but something like 15% would still be amazing. Any ideas?

RichL74

Hi you need to ignore what the scores tell you. Fair doesn't mean anything to a lender - they will never see that word or any other words or scores that they use.

Sheriffsam

RichL74 wrote: »

Hi you need to ignore what the scores tell you. Fair doesn't mean anything to a lender - they will never see that word or any other words or scores that they use.

SO what are the main things they will see? Missed payments and balance to limit ratio?

BugsyBrowne

Sheriffsam wrote: »

SO what are the main things they will see? Missed payments and balance to limit ratio?

Credit limit utilisation in other words near you're credit limit looks negative also debt to income to much debt compared to salary also looks negative.
Missed payments/late payments CC'js Defaults all these are big negative and the credit report killer is to many credit searches.

Sheriffsam

No ccj's, but had one late payment 7-8 months ago.

My utilisation is 78% from my working. I'm guessing thats pretty crap.

If i can get a CL increase on one of my cards, would that help?

BugsyBrowne

Sheriffsam wrote: »

SO what are the main things they will see? Missed payments and balance to limit ratio?

Sheriffsam wrote: »

No ccj's, but had one late payment 7-8 months ago.

My utilisation is 78% from my working. I'm guessing thats pretty crap.

If i can get a CL increase on one of my cards, would that help?

Have you had a quote off nationwide yet?

RichL74

I dont think they like to see any missed payments for the past 12 months.

You have not missed 3 or more payments on any credit commitments in the last 12 months

But that doesn't mean they'll let you off with just the one though.

Blue_Max

Life is busy and missing a payment is easy to do.
Why not setup a Direct Debit at least for the minimum payable?

Personally, I don't like paying interest to credit card companies so I set up Direct Debits to pay off everything on the due date.