Credit Builder Cards, Too Many Harmful?

carlbcfc

In my quest to improve my 'credit score' before a mortgage application next year I decided the take out some credit builder cards, 3 in fact, with the intention of sticking my weekly fuel on them (£30), and paying them off straight away. I backed this up my setting a direct debit to payment in full on all cards.

On the application of 3 cards my 'score' dropped from the 800's to the 700's. To be expected of course.

The limits on the cards are £1000, £250, £250, and I will ONLY use them for fuel on alternate weeks and pay it off asap.

My reason for coming here is I am staring to think I made a mistake ordering 3 cards. Initially I thought my plan to have 3 credit accounts showing green over time would be a great idea. Now, after reading around I see it may be harmful to have so many credit accounts active, even if I barely use them.

There is no danger of me falling into the card trap as I am lucky enough to now not need to borrow. If you could please stick to the points, and stay ON TOPIC, that would be great, thanks.

Tixy

3 cards would not usually be viewed as excessibe.

However I don't think having 3 cards opened at similar times worth of credit history is likely to be preferred by a mortgage lender compared to 2 cards worth of credit history.

In terms of 'paying off straight away' are you are waiting for the statement to be generated before you pay the outstanding balance? If not then do.

carlbcfc

Thank you for the reply. Just to clarify, should I only use 2 cards and leave one unused? Also, I did plan to pay off by debit card payment before a statment. Is it best to let the DD go out or clear the balance a day or 2 after using the card?

carlbcfc

Anybody clarify?

matttye

carlbcfc wrote: »

Thank you for the reply. Just to clarify, should I only use 2 cards and leave one unused? Also, I did plan to pay off by debit card payment before a statment. Is it best to let the DD go out or clear the balance a day or 2 after using the card?

Let the DD clear it each time.

Now that you've opened them I'd say keep and use all three. If you close one as soon as you've opened it it could indicate indecisiveness.

Tixy

If you pay it off too soon then it may not help you build up a credit history (as it may show no use of the card at the point of the monthly update).

The_Boss

carlbcfc wrote: »

On the application of 3 cards my 'score' dropped from the 800's to the 700's. To be expected of course.

---

There is no danger of me falling into the card trap as I am lucky enough to now not need to borrow. If you could please stick to the points, and stay ON TOPIC, that would be great, thanks.

Para 1 - why is that to be expected? Also you do not have a credit score so cannot improve 'it'.

Para 2 - why have you assumed people will reply in a certain way before anyone has replied?

Btw I think.your strategy of using 3 cards is sensible as it means more positive data (assuming accounts correctly managed) than if you had one or two. Three is a low number, your limits are low and you do not intend maxing them out.

Thrugelmir

3 cards will not benefit you in anyway with regards to a mortgage application. Managing one properly will suffice. The excess ones tell the lender nothing of interest about you and your ability to manage money responsibly.

20aday

Tixy wrote: »

3 cards would not usually be viewed as excessibe.

However I don't think having 3 cards opened at similar times worth of credit history is likely to be preferred by a mortgage lender compared to 2 cards worth of credit history.

In terms of 'paying off straight away' are you are waiting for the statement to be generated before you pay the outstanding balance? If not then do.

Ah, I've been guilty of this!

Most months (say eight out of twelve) I've had a zero balance by the time my credit card statement is generated.

Thank you for that helpful piece of advice!

redcard

There's 100s of identical threads all over MSE.

The answers are always:
- You wasted money on a worthless score
- No one knows

carlbcfc

The_Boss wrote: »

Para 1 - why is that to be expected? Also you do not have a credit score so cannot improve 'it'.

Para 2 - why have you assumed people will reply in a certain way before anyone has replied?

Btw I think.your strategy of using 3 cards is sensible as it means more positive data (assuming accounts correctly managed) than if you had one or two. Three is a low number, your limits are low and you do not intend maxing them out.

Para 1. Credit searches, especially 3, will lower the 'score'. It's just a guide for me.

Para 2. Amongst all the helpful people on this site, there are those that love nothing better than to be a smart !!!! and drag things off-topic.


Does it matter how little I use each month? Is a positive payment report for say £5 viewed the same as £30 does anyone know?