First credit card - How to improve credit rating?

thebritishbloke

Anthorn wrote: »

Let's look at credit cards in more detail:

First of all we can dismiss the fallacy that lenders make a lot of money on card transaction fees. If that were the case retailers would be kicking up against it.

You only pay one bill per month, that bill could have 100 transactions on it. They're making small amounts of quick profit from each of these transactions, not all their transaction profit is being taken from one retailer.

Now where does a credit card lender's profit come from? That comes from interest.

And transaction fees.

Now we consider that every penny we pay over and above the required minimum reduces the lender's profit. If we pay all of the balance we are preventing the lender from making any profit at all.

See above, re transaction fees.

The point that paying the whole balance is best in the relationship with the lender doesn't stand up to scrutiny. It doesn't even make sense. It doesn't even make sense in the (re)building of a credit history: All it tells the lender is that a cat-in-hell has a better chance of making a profit.

It tells lenders that you're an easy and safe profit. Look at some of the documents lenders have released, they love safe customers, because it helps to offset the loss from bad customers (those who default), and there's very little risk with people who pay off in full every month.

I can't believe you seriously still have this stuck in your head, when every thread that I confront you about this, people agree with me.

Anthorn

Lenders aren't obliged to dole out credit. Instead, decisions revolve around how much money you're likely to make them. This means savvy customers who always repay in full, or shift debt to 0% cards to avoid interest, may get rejected as the bank'll make no money!

http://www.moneysavingexpert.com/loans/credit-rating-credit-score

bsms1147

Anthorn wrote: »

Lastly if you're going to be a sheep be the sheep at the front and choose your own direction.

Don't worry, I'll be your own personal sheep if you want. Each time you appear in a thread spouting your misinformation, I'll shortly follow so that others don't take on board your terrible advice.

thebritishbloke

Anthorn wrote: »

http://www.moneysavingexpert.com/loans/credit-rating-credit-score

May being the key word there, in practice it's not exactly true. Look at how many people are on this forum who always advocate paying in full, and they all have good cards and credit deals.

Good to see your "good" credit advice is helping you, you've moved from a Vanquis card, to an Argos card, which by the way, is just a re-branded Vanquis card.

Oh, and according to your signature, you're £900 in debt. So your "debt free" part is also a lie. Considering you're not paying off in full, it makes you look like you can't afford to pay it off. Stop kidding yourself.

bsms1147 wrote: »

Don't worry, I'll be your own personal sheep if you want. Each time you appear in a thread spouting your misinformation, I'll shortly follow so that others don't take on board your terrible advice.

I'll join you.

Anthorn

thebritishbloke wrote: »

Look at how many people are on this forum who always advocate paying in full

Yes they do don't they. That needs to be stamped out because they are giving bad advice and leading newbies and vulnerable people astray.

thebritishbloke wrote: »

Good to see your "good" credit advice is helping you, you've moved from a Vanquis card, to an Argos card, which by the way, is just a re-branded Vanquis card.

No. "Store card credit for Argos Ltd is provided exclusively by Home Retail Group Card Services Ltd, part of the same group and both at 489-499 Avebury Boulevard, Milton Keynes, MK9 2NW." You're thinking of the Argos Credit Card.

thebritishbloke wrote: »

Oh, and according to your signature, you're £900 in debt. So your "debt free" part is also a lie. Considering you're not paying off in full, it makes you look like you can't afford to pay it off. Stop kidding yourself.

No, debt is not bad debt and there is a difference. If you think all debt is bad debt then in that case I'm guessing that you yourself have a lot of bad debt: Energy companies, telephone, mobile phone, even the credit card you pay off every month!

I won and you lost, I'm victorious and you're defeated, I know and you don't have a clue, I give good advice and you give bad advice, etc. etc.

here's that link again:

Lenders aren't obliged to dole out credit. Instead, decisions revolve around how much money you're likely to make them. This means savvy customers who always repay in full, or shift debt to 0% cards to avoid interest, may get rejected as the bank'll make no money!

http://www.moneysavingexpert.com/loans/credit-rating-credit-score

Ok I'm bored with you now. Yawn.

thebritishbloke

Anthorn wrote: »

Yes they do don't they. That needs to be stamped out because they are giving bad advice and leading newbies and vulnerable people astray.

Well done for only partly quoting me.

No. "Store card credit for Argos Ltd is provided exclusively by Home Retail Group Card Services Ltd, part of the same group and both at 489-499 Avebury Boulevard, Milton Keynes, MK9 2NW." You're thinking of the Argos Credit Card.

My mistake.

No, debt is not bad debt and there is a difference. If you think all debt is bad debt then in that case I'm guessing that you yourself have a lot of bad debt: Energy companies, telephone, mobile phone, even the credit card you pay off every month!

Never said that all debt is bad, merely that you're advocating not paying off in full, and claim you're debt free.

I won and you lost, I'm victorious and you're defeated, I know and you don't have a clue, I give good advice and you give bad advice, etc. etc.

Ok I'm bored with you now. Yawn.

Feel free to have that stuck in your head, but you should realise there's a reason that so many people on this forum don't agree with what you say. You're just going to get into these discussions every single time you post this "advice" on a thread.

Anthorn

thebritishbloke wrote: »

Never said that all debt is bad, merely that you're advocating not paying off in full, and claim you're debt free.

I agree that my signature didn't say what I meant it to say so I edited it and now it does. Basically no-one can be debt free for as long as they have some service for which they pay at the end of a period after they have used it.

DevilsBakBone

Simple rules stick to them and you will have a 900+ credit score in a couple of years.

1. Never miss a payment
2. Use a credit card for a regular payment (petrol) and pay it off in full.
3. Get a second credit card after 6 months; you can have a poor rating due to the lack of credit.
4. Only use credit cards to pay for a regular payment. Treat them as part of your pay and keep the money aside from your wage. Never get carried away! If you can afford it don’t buy it.
5. Join the electoral register
6. Don’t apply for credit more than twice in 6 months, this will be seen as someone who wants to get in debt.
7. Never miss a payment

Good luck.

SuperHan

thebritishbloke, I feel like I have passed on my torch.

I felt like I was a one man army against Anthorn at one point - I was questioning my own logic!

I still don't understand why he thinks we will take advice from a guy with two subprime cards. If you are such a gold mine for these credit card providers, why aren't they falling over to offer you higher limits, prime cards, rewards and lower APRs? That's right, because you're willing to pay c. 30% interest on your debt, so you look like you're in desperate need for it, as you're willing to pay over the odds, so they'd be stupid to offer you a lower rate as they'd be losing money. My cards are desperate to entice me into a 0% BT period so that they will make some money out of me. They are savvy enough to know that they need to offer me a better deal if they want to make money out of me.

I don't disagree, the way you use cards is one way of using them. But it's costly, and to no real advantage. You may as well just pay for your credit score and follow the advice there to get better credit ratings for the same price. Plus, if you do it my way and pay off in full, there's no risk of those pesky defaults that you are so excited to get rid of.

I've been paying in full for 6 years now, since I turned 18, and I've now got a mortgage as a first time buyer. My own bank are surprised I've managed success with my mortgage lender as they are usually reluctant to take on younger applicants or first time buyers, so that paying off in full has done me no harm.

I'll enjoy the free cash back and reward vouchers I get from paying back in full, and you enjoy your excessive credit card bills with all that hefty interest on there.

Anthorn

SuperHan wrote: »

thebritishbloke, I feel like I have passed on my torch.

I felt like I was a one man army against Anthorn at one point - I was questioning my own logic!

I still don't understand why he thinks we will take advice from a guy with two subprime cards. If you are such a gold mine for these credit card providers, why aren't they falling over to offer you higher limits, prime cards, rewards and lower APRs? That's right, because you're willing to pay c. 30% interest on your debt, so you look like you're in desperate need for it, as you're willing to pay over the odds, so they'd be stupid to offer you a lower rate as they'd be losing money. My cards are desperate to entice me into a 0% BT period so that they will make some money out of me. They are savvy enough to know that they need to offer me a better deal if they want to make money out of me.

I don't disagree, the way you use cards is one way of using them. But it's costly, and to no real advantage. You may as well just pay for your credit score and follow the advice there to get better credit ratings for the same price. Plus, if you do it my way and pay off in full, there's no risk of those pesky defaults that you are so excited to get rid of.

I've been paying in full for 6 years now, since I turned 18, and I've now got a mortgage as a first time buyer. My own bank are surprised I've managed success with my mortgage lender as they are usually reluctant to take on younger applicants or first time buyers, so that paying off in full has done me no harm.

I'll enjoy the free cash back and reward vouchers I get from paying back in full, and you enjoy your excessive credit card bills with all that hefty interest on there.

It's below the belt to comment on a signature which is not actually part of the discussion or debate. But to answer your below the belt comment inserted just to attack me personally and for no other reason, I don't have a prime card because I can't get one, simple. But even when I can quite comfortably get one next month I doubt if I will: I'm very happy with Aqua and I don't see the point in dumping them. In 17 months my APR will be 19.9% equivalent to for example to a Nationwide card.

In appraising my overall credit limit used you are not considering my Argos card and whether I bought on Buy Now Pay Later and whether I'm saving over that period to pay it off in full. The Argos (store) card is operated quite differently to a usual credit card.

My point over three threads is that the one and only advantage of paying off a credit card in full is that you escape paying interest and that in itself could have a negative impact on your credit history.

Lastly, my rebuilding of my credit history is not yet fully complete because the loans section is empty. If I want to fill that section it means getting a personal loan and that means paying interest!