How to max credit rating with credit cards

grandplonker

I have an OK credit rating. It's about 710 and I'm getting a first credit card, Aqua Rewards.

How do I use it to increase the above credit rating?

Obviously I'll pay it off religiously every month and always stay within the limit. But should I be using all of the credit limit, a quarter of it...?

Supposing the credit limit were £500 and I had spent £200. On the last day of the month I could call the credit union and put then pay £290 into my credit union balance. Then I've used £490 of the limit. (My credit union balance would actually about £298 up because of 3% cashback.) If I need the £298 again, I can transfer it from credit union to bank. That way I can control how much of the credit limit on the card I use each month.

Suggestions, MSE elves? How much should I be using to get the best mortgage rate in future years?

bengalknights

Just use it any way you like most credit is based around debt to income levels so if your paying it in full it wont have much effect on your credit chances

BugsyBrowne

You have an OK credit rating with Experian which is not your actual credit score as these are private only to a lender when accessing an application.
Experian are not a lender so discount your score as its worthless.

Keep paying bills on time and don't max out credit cards.

grandplonker

Bugsy,

Credit rating and credit score - can you say more/link to something here?

I've used checkmyfile.com before and seen my entire credit report, so borrowers can see all their info.

The secret is how lenders decide whether to lend.

BugsyBrowne

grandplonker wrote: »

Bugsy,

Credit rating and credit score - can you say more/link to something here?

I've used checkmyfile.com before and seen my entire credit report, so borrowers can see all their info.

The secret is how lenders decide whether to lend.

You need to check Equifax & Experian just your report ONLY and forget about those silly scores they sell you as lenders don't see them nor would they care as lenders use their own unique scoring when accessing an application.

Check your reports YES check your score NO

grandplonker

Bugs, you're saying lenders just put my credit report through a computer, and make a 'yes/no' decision from a secret formula. They ignore the numerical credit score. OK.

Same question applies. In 2015, a lender might look back on this card. I'll be more accepted if a) it's near maxed out, b) used well within limits, or c) they don't care.

izools

grandplonker wrote: »

lenders just put my credit report through a computer, and make a 'yes/no' decision from a secret formula. They ignore the numerical credit score

I think this is phrased brilliantly, couldn't have said it better myself, thanks!

JakeGreen

grandplonker wrote: »

Bugs, you're saying lenders just put my credit report through a computer, and make a 'yes/no' decision from a secret formula. They ignore the numerical credit score. OK.

Very well said!

Lenders don't even see the Equifax or Experian 'score'.

While the specific number doesn't mean too much, it does give you an indication of how much of a risk you are to lenders.

Time your application for new credit (loans, mortgages, cards) when you are carrying a zero or near to zero balance on your credit cards.

chanz4

only exception that I know of is zopa as they buy it from equifax

BugsyBrowne

chanz4 wrote: »

only exception that I know of is zopa as they buy it from equifax

Many lenders buy from Equifax & Experian but they are Not the same scores what us as individuals see.

Icare_3

Hi. Ive had bad credit in the past because of missing a couple of payments, this was due to a bad phase in business. Things are much better now and I dealt with al my loans and cards by putting up agreements and sticking to them. I have stopped all agreements and am back to minimum payments and currently using 75-80% credit. I want to increase my credit rating and was looking at the credit cards available for poor credit like capital one.. will that actually make a difference? Wont it look like ive got cards with too many banks and Financial bodies?