How best to manipulate credit score using credit cards?

notmyrealusername

Will be looking to obtain a mortgage in approx 2-3 years time so am busy saving a deposit and am looking to maximise my credit score but not sure what 'behaviour pattern' is more desireable - I have approx 10.5k credit available and have a revolving balance of approx 1.2k spread accross credit cards which is paid off in full each month - I have never paid a penny interest on any of the cards. The cards are for convenience only and I never intend to use any actual credit, I well and truly learned my lesson after the IVA and only ever buy something on the credit card if I have the money ready to pay the bill off in full straight away.

First the background:

IVA started Sept 2006, completed by way of full and final settlement Sept 2009. All defaults and IVA now removed from my credit report as it has been more than six years ago since I started the IVA. I understand that I will still have to declare the past IVA so want the rest of my file/behaviour to be as desireable as possible!

Bank account since 2006 - never had a payment returned or gone a penny overdrawn.
Electoral roll at same property since 2008
Same employer since 2005 - 30k salary

Argos card since 2002 (2.5k limit)
Vanquis card since Feb 2010 (2k limit)
Creation card since Nov 2010 (2.5k limit)
Creation card since Sept 2011 (2k limit)
HSBC card since Nov 2012 (1.5k limit)

All cards are used every month and then the balance paid off in full without fail. On the face of it I thought I was a good credit risk but was recently declined for Lloyds and Nationwide after a soft search indicated a reasonable chance of acceptance but then after those declines accepted for a John Lewis (HSBC) card.

My intention was to close the Vanquis account to reduce my available credit but as that is my earliest line of credit after my IVA finished then I would be potentially closing my longest line of credit which I thought showed stability?

Any tips on how best to run the credit cards? Should I cancel any of them? Am I doing the right thing running up a small balance on each of them every month before paying off in full?

Thanks for any input

rb10

Personally I'd cancel a couple of them, at least. You have a lot of available credit, which may be why you have been declined.

I believe that 'stability' is generally measured through employment status, residential status (tenant etc), time at address and time with bank (for current account), but not the length of time you've held a credit card, so I do not think that closing the Vanquis card would have a material impact.

But otherwise, all looks good. Spending, and paying off in full, is seen as a Very Good Thing.

notmyrealusername

Thanks, I intend to stay in the same job (touch wood!) and home for the forseeable and despite my bank not even being prepared to give me a £500 overdraft (with a clean credit file, no defaults/IVA - they didn't even credit check me) I don't want to lose the stability factor of having been with them for 6 years+ already so will stick with the same current account.

Sounds like it is time to say goodbye to the Vanquis as a minimum, I know many people knock Vanquis for their ridiculous interest rates but they have served me well as a credit builder card without me ever paying them a penny in interest and I am now 'mainstream' in that I was recently accepted for a HSBC backed card who I understand from reading on here are ususally fairly picky.

rb10

notmyrealusername wrote: »

Thanks, I intend to stay in the same job (touch wood!) and home for the forseeable and despite my bank not even being prepared to give me a £500 overdraft (with a clean credit file, no defaults/IVA - they didn't even credit check me) I don't want to lose the stability factor of having been with them for 6 years+ already so will stick with the same current account.

Your bank wouldn't need to credit check you for an overdraft, as they get an automatic monthly feed from the credit reference agency with all your updated info on.

There's nothing at all to stop you from switching your bank account, although it might be worth keeping your existing one open as well (and unused). That way, you can still say that you've been with your bank for X years.

droiderm

Be prepared so save up as big as a deposit as you possibly can.
Have you thought about what size of deposit you may need?

I know bankruptcy could be around 20% possibly more.

notmyrealusername

rb10 wrote: »

Your bank wouldn't need to credit check you for an overdraft, as they get an automatic monthly feed from the credit reference agency with all your updated info on.

There's nothing at all to stop you from switching your bank account, although it might be worth keeping your existing one open as well (and unused). That way, you can still say that you've been with your bank for X years.

I think that's what the problem was, I applied for the overdraft to test the water as soon as my default fell off - I posted about it at the time and the suggestion was that the bank had a monthly feed with the default on and that I applied too soon. It's not a big deal either way as I don't need an overdraft, it was merely to test my credit-worthiness with no defaults/IVA on my report.

That aside there's no real reason for me to switch so may as well just stick with what I know!

droiderm wrote: »

Be prepared so save up as big as a deposit as you possibly can.
Have you thought about what size of deposit you may need?

I know bankruptcy could be around 20% possibly more.

I will probably have a 15% deposit in around 2-3 years - who knows whether house prices will have crashed/rocketed up by then or whether the mortgage market will have relaxed/tightened further. All I can do is save as much as possible every month and see what happens. By then (2014-2015) I will have been out of the IVA for 5-6 years and managing post-IVA credit for 4-5 years.

rb10

notmyrealusername wrote: »

That aside there's no real reason for me to switch so may as well just stick with what I know!

...other than the prospect of getting interest on your current account, or monthly reward payments, or free travel insurance.

And also getting better customer service elsewhere.

Why stick with a bank that gives you nothing back?

notmyrealusername

rb10 wrote: »

...other than the prospect of getting interest on your current account, or monthly reward payments, or free travel insurance.

And also getting better customer service elsewhere.

Why stick with a bank that gives you nothing back?

I syphon off all my excess funds in my current account to a savings account, plus I have a pre-existing medical condition that wouldn't be covered under an account bundled insurance policy.

I'm happy with the branch location on the occasion I need to go in and pay cheques in eg free and easy parking, distance from work/home is handy, the online banking and mobile app is good so for me there is no real value in moving elsewhere!

droiderm

notmyrealusername wrote: »

I think that's what the problem was, I applied for the overdraft to test the water as soon as my default fell off - I posted about it at the time and the suggestion was that the bank had a monthly feed with the default on and that I applied too soon. It's not a big deal either way as I don't need an overdraft, it was merely to test my credit-worthiness with no defaults/IVA on my report.

That aside there's no real reason for me to switch so may as well just stick with what I know!



I will probably have a 15% deposit in around 2-3 years - who knows whether house prices will have crashed/rocketed up by then or whether the mortgage market will have relaxed/tightened further. All I can do is save as much as possible every month and see what happens. By then (2014-2015) I will have been out of the IVA for 5-6 years and managing post-IVA credit for 4-5 years.

Unfortunately in terms of bankruptcy some lenders will never lend irrespective of how long ago it was. I think some have similar rules for iva.
All i am trying to get across no matter how good your credit is afterwards some things will always be there.

Your right all you can do is save as much as you can.
Just trying to help you avoid disappointment potentially when the time comes.

notmyrealusername

droiderm wrote: »

Unfortunately in terms of bankruptcy some lenders will never lend irrespective of how long ago it was. I think some have similar rules for iva.
All i am trying to get across no matter how good your credit is afterwards some things will always be there.

Your right all you can do is save as much as you can.
Just trying to help you avoid disappointment potentially when the time comes.

Yep, I had read similar - hence trying to make my file as appealing as possible to those lenders who do consider ex-IVA. I know that a whole of marker broker will be essential.

droiderm

Understood :-)
Best of luck when the time comes.