New Credit or Existing after DMP

chris_h16

Hi
We are coming to the end of our DMP in August. We plan on getting a high interest credit card and using it for petrol or food shopping and paying off in full each month.
Question is is it better to close our existing accounts, some with defaults and get a new card or if allowed by the company carry on with some of our existing cards? Which will be better for starting to improve our credit rating?

Tixy

Hi

Likely best to try to get a new subprime card.

No point using any account with a default registered against it. It will not help build a credit history (and very unlikely that a lender would allow you to).

What other existing accounts do you have that are still open that do not have defaults? and what is showing on your credit files for these accounts?

chris_h16

Off the top of my head I'm sure exactly. Some accounts have Arrangement to pay/debt management plan as a status/note. Some have 3 months in arrears registered from the 3 months to present. If an account has any of these statuses would it be best to close and get a sublime credit card?

Thrugelmir

Why not just pay using cash or debit card? Credit cards where your downfall, so kick the habit and learn to budget to your income.

chris_h16

We are budgeting to our income, we only want a credit card to rebuild credit rating, to show we are able to manage prove, its a way to prove.
If are going to say why do we need to improve our credit rating, because we are looking to get a mortgage shortly after our defaults drop off.

Thrugelmir

chris_h16 wrote: »

We are budgeting to our income, we only want a credit card to rebuild credit rating, to show we are able to manage prove, its a way to prove.

Prove what? Credit cards are revolving credit, so clearing the balance every month means nothing from a lenders perspective. As next month the facility is there to be used again. Too many people end up in the same downward spiral. Put a holiday on the card, job loss or sickness strikes. Balance owed increases, and so on. That's where a mortgage lender is coming from.

A fixed term commitment like a loan is different. As there's a definative end. So a credit profile is marked as being satisfactorily completed.

chris_h16

A credit card also shows you can meet the payments each month. We won't have a high enough limit to put anything large on.

Thrugelmir

chris_h16 wrote: »

A credit card also shows you can meet the payments each month.

So someone that never uses a credit card would be viewed differently then in your opinion. Have a lower credit score than someone who does?

jonesMUFCforever

We are supposed to be nice to all posters right - perhaps OP can tell me what percentage of the total debt he has repaid under his DMP? and he wants to get a subprime credit card to improve his credit score that he couldn't manage the first time round.
Has he learnt nothing ---- stupid question!

Thrugelmir

jonesMUFCforever wrote: »

We are supposed to be nice to all posters right

Indeed we are. This a forum. Which is defined as a medium where ideas and views on a particular issue can be exchanged.

So challenge peoples perceptions in the right way. :beer:

chris_h16

Its a well known process to rebuild credit ratings that Martin himself still states if the balance each monfh is paid off in full.
Difference is I wasn't paying them off in full before, I'd just starting working, I was 18, first credit cards, thinking its free money, only paying the minimum payments. Difference now is I'm on a £30,000 salary, i can afford a low credit card limit easily, and I only want it to build by credit rating because I've read and heard it so many times they help to prove you can manage money and
meet payments.
This has gone so of topic now, you know the original question I had, if it doesn't answer my original question please don't fill my thread.