Advice needed

Chimpy9

I need to improve my credit score, currently at 601 main reason is the amount of debt, always on time with payments, etc.

I have 3 credit card totalling about £13,000 (5 on two, 3 on one)

I have been given £5000 to pay off one, however I want to get rid of the credit card, will this help my credit score or should I keep the card active but don't use it?

Gizmo247

If you close the credit card account then your debt to credit ratio will get worse. Probably wise to keep the card and if you can't trust yourself then cut it up but keep the account open.

matttye

Don't pay any attention to the credit score, just the information in your report.

[Deleted User]

Use the £5k to pay off whichever card charges the highest interest rate. I would then recommend keeping that card open for a while, maybe even use it for normal purchases and pay it off in full each month.

Even better, check to see if any of your cards offer a 0% (or at least low) balance transfer deal. If they do, use the £5k to pay off that card and then transfer the balance from one of your others. This way you could significantly reduce the amount of interest you are paying each month and means that more of your payment will go towards actually reducing the debt.

If you're not sure about what I've just said then post a list of which credit cards you have, how much interest you are paying (should say somewhere on your statement - if not call and ask). Also provide a list of the limit for each card and how much you owe.

Chimpy9

As far as I know none of my cards offer a 0% balance transfer option. I think I am going to pay off my RBS card which has a 18.9% APR. This leaves my Natwest credit card (I also bank with Natwest) and £3k on my Barclaycard. All have similar APR's like RBS.

If I make small purchases but then pay it off in full every month will that improve my credit file?

matttye

Chimpy9 wrote: »

As far as I know none of my cards offer a 0% balance transfer option. I think I am going to pay off my RBS card which has a 18.9% APR. This leaves my Natwest credit card (I also bank with Natwest) and £3k on my Barclaycard. All have similar APR's like RBS.

If I make small purchases but then pay it off in full every month will that improve my credit file?

Yes definitely. Try not to exceed 50% of your credit limit.

[Deleted User]

Chimpy9 wrote: »

As far as I know none of my cards offer a 0% balance transfer option. I think I am going to pay off my RBS card which has a 18.9% APR. This leaves my Natwest credit card (I also bank with Natwest) and £3k on my Barclaycard. All have similar APR's like RBS.

If I make small purchases but then pay it off in full every month will that improve my credit file?

It's worth double checking with your providers if they have a 0% transfer deal - especially with Barclaycard as I' sure they offer them quite frequently. Not the end of the world if they don't but it will definitely be the cheapest option for you.

Another option, if you can stick to the rules, would be to apply for a balance transfer card. If you can get it then it's all good, if not then a single credit search won't do you much harm.