Credit Card and Credit Score?

manhattan

Hi,
I have a credit card that has a £8880 limit, so would that amount affect my credit score?

I always pay on time and current balance is around £60, so £8820 available.

No late payments etc.

I am just wondering if my credit report will see this amount as an available loan of £8880 and reduce my credit score?


Thanks.

Fruit_and_Nut_Case

manhattan wrote: »

I am just wondering if my credit report will see this amount as an available loan of £8880 and reduce my credit score?

It wouldn't matter much if it did. The "score" is something between the Credit Reference Agency and yourself. A potential lender would not see it.

YorkshireBoy

manhattan wrote: »

I am just wondering if my credit report will see this amount as an available loan of £8880 and reduce my credit score?

The people giving you this "score", ie Experian & Equifax, don't know your salary/income is not circa £100K per annum, nor that you own two properties outright (ie no mortgage), so why would they reduce their score of you?

And what would it matter if they did?...they don't lend money!

simeyb

It would indicate to a lender that you aren't up against it i.e. that you haven't used your current available credit and now want more - that would be seen by a lender as an issue, but say you now wanted a loan for home improvements, but a credit card wouldn't be the right thing to use to finance that, a prospective lender would see your low borrowing to available ratio as a positive thing

StuC75

Wanting more credit when you could use other sources isn't an issue with lenders - I recently took out a 4th credit card and significant loan all with no issue whatsoever and Experian's internal credit score unaffected by it..

They can only base there score on what they see in terms of your credit history and account conduct - low utilisation %'s or regularly paid in full can only be a positive thing.. Much better than high balances & minimum payments only ~ although lenders would like the increased profits this brings from you, when they are first considering your application a responsible lender would consider if you were too stretched in terms of affordability..

When you apply with an actual lender they will take all the application information -salary \ home status and pool with credit history to make a more informed scoring of your situation to see if you match there 'ideal customer'...

simeyb wrote: »

It would indicate to a lender that you aren't up against it i.e. that you haven't used your current available credit and now want more - that would be seen by a lender as an issue, but say you now wanted a loan for home improvements, but a credit card wouldn't be the right thing to use to finance that, a prospective lender would see your low borrowing to available ratio as a positive thing

Experian_company_representative

The score we give you reflects the scores we build for typical lenders. A high unused credit card limit is likely to be seen as a positive in terms of your credit rating as it shows that another lender really trusts you and you aren't needy.

James

BugsyBrowne

Experian_company_representative wrote: »

The score we give you reflects the scores we build for typical lenders. A high unused credit card limit is likely to be seen as a positive in terms of your credit rating as it shows that another lender really trusts you and you aren't needy.

James

But as your scores don't know the lenders criteria they're looking for and yourselves not taking in salary etc etc in theory makes your scores not really reliable Mr Jones.