Positive balance on credit card and credit rating

matt1234

Hi,

I consistently overpay on my Lloyds credit card as I put through a lot of spending on it and do not wish to go over limit. So I have a £3000 limit and the available amount will often say more than this as I make overpayments.

I have just checked over my credit report on ID aware and these balances are showing as negative there. I.e if I have say 5k available on the 3k credit limit card, it shows as minus 2k on the credit report.

Does anyone know if this may be having an adverse effect on my credit rating or if it could in fact be viewed positively?

Thanks :beer:

redpete

It depends on how each lender works out their credit scoring; if I was doing it I would treat a positive balance (negative debit) as £0 so it would have no effect on the score - but I don't programme anyone's credit scoring algorithms.

Seems an odd way to run a credit card though - to sometimes have as much as £2k positive balance (or IMO any credit balance).

Note that it couls cause you problems; some CCs don't allow positive balances and you could find the money transferred back to you when you are expecting it to be in the CC account, also Section 75 claims might not be possible if the transaction is paid out of a positive balance (the CC is not lending you any money for the purchase so they might not be counted as an equal partner with the supplier in the deal).

matt1234

redpete wrote: »

Note that it couls cause you problems; some CCs don't allow positive balances and you could find the money transferred back to you when you are expecting it to be in the CC account, also Section 75 claims might not be possible if the transaction is paid out of a positive balance (the CC is not lending you any money for the purchase so they might not be counted as an equal partner with the supplier in the deal).

I am aware that some banks don't want you to be in credit due to the different regulatory regime for deposit taking, but I have been doing this for maybe 2 years without any issues. The positive balance is often brought down within a few days. I do put through a lot of spending on it.

I just want to clarify the issue with the credit report as I didn't like the look of all those negative balances and I will be applying for a mortgage next year so I don't want to risk anything.

izools

There isn't a yes/no answer.

Scoring models are unique to each lender and a closely guarded corporate secret.

zerog

I think you should ask them for a higher credit limit.