Best possible credit rating advice

maximise

Would it be possible to get your advice on how to get the best possible credit rating in my situation - I am 27 and have several questions




I am planning to move from my parents address to renting a flat with a friend:

How will registering on the electoral roll with my new address affect my credit rating.. do I need to?

Will I need to change my address of my bank accounts, credit cards etc.?




I have 5 credit cards:

1 of which I pay off every month in full,

4 of which are now paid in full;

previously I did make full use of the credit and only made minimum repayments over the past 2 years.

How will my credit rating be affected if I keep regularly using these cards and pay off in full each month?

I think I read on here that having access to credit but not using it looks favourable in terms of building credit rating.

Or should I close some of the credit cards?




In 1-2 years I plan to have saved enough money to buy my own place with a mortgage.


What will be best for my credit rating with respect to getting a mortgage, loans etc?


Many thanks.
Yours,

maximise

Tessie_Balloon_Juice

Hi Maximise,

I'm not an expert on this but as far as I'm aware it'll be in your favour to update all your financial products with your new address when you move. If your utilities accounts etc are set up in your name there will soon be 2 addresses showing on your credit file so it's best to get everything registered under one address. It helps to confirm that you're at a permanent fixed address and you aren't likely to move away without informing anyone. Make sure you change your address on the electoral roll as well. Not being registered, or being registered at the wrong address negatively affects your rating. I know this through recent personal experience.

I think there's a bit of debate about whether paying your cards off in full every month will affect your rating positively or negatively. Obviously if you're clearing your balance every month you'll be considered a low risk customer. On the other hand, lenders exist to make a profit and those who only make minimum payments pay more interest and make more money for the lenders. Its a tough one.

I try to get around it by keeping a balance of about £100 on one card. I have a standing order set up to pay the minimum payment every month. With everything else I clear the balance off in full. This way I hope that my credit report indicates that I'm a low risk customer but there is also potential to make a profit from lending to me. It costs me a little bit in interest each month but I'm happy to pay it for the sake of my credit score. As long as you make your payments on time I think you'll be ok. It's missed and late payments that really start knocking the points off your score.

When it comes to unused credit, I've heard that it can negatively affect your rating. Again, I think there are pros and cons to unused credit. There's a whole article about it here http://www.moneysavingexpert.com/credit-cards/cancel-unused-cards

As I say, I'm by no means an expert and there's a possibility I'm totally wrong, but I hope this helped a bit!

maximise

Thank-you Tessie_Balloon_Juice!