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First credit card - How to improve credit rating?
Comments
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Thank you! At this point I'm done talking to him direct, I'm just going to have to negate it every time he tries to give someone this advice.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.
Their comment wasn't below the belt at all, the discussion is whether your advice is good or not, your signature reflects your financial status because you've followed your own advice.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!
Personal loans are completely different to credit cards, and the interest rates are much lower.Credit 'Score' - Don't buy the credit 'score' that Experian, Equifax and Noddle want to sell you. It's an arbitrary number that means nothing when it comes to applying for credit.
ALWAYS HAVE A DIRECT DEBIT SET UP FOR THE MINIMUM PAYMENT ON YOUR CREDIT CARDS, REGARDLESS OF WHETHER YOU PLAN TO LOGIN AND PAY EACH MONTH.0 -
thebritishbloke wrote: »Personal loans are completely different to credit cards, and the interest rates are much lower.
Are they really? Provident Personal loan of £500 paid over 52 weeks at 272.2% APR, £500 over 23 weeks 545.2% APR.
I really don't give give two hoots what you you think but you seem to be overlooking that MSE gives that same advice.
Why don't you just admit that you don't have a clue. Do you want me to post that link yet again or are you going to read back. Bye bye.0 -
Are they really? Provident Personal loan of £500 paid over 52 weeks at 272.2% APR, £500 over 23 weeks 545.2% APR.
I really don't give give two hoots what you you think but you seem to be overlooking that MSE gives that same advice.
Why don't you just admit that you don't have a clue. Do you want me to post that link yet again or are you going to read back. Bye bye.
But how can you think your advice is right, when you by your own admission can't get a prime credit card?!?!??!?!?!
If somebody wants to build a credit rating, it is so they can get a prime credit card.
My highest APR is 18.9%, and the card I spend on most at 16.5%. I was offered these, despite paying in full. So by paying in full, I can actually do what you do for less cost.
If I was to integrate your advice in to mine at all, my stance would be pay in full until you have a good enough rating to be offered cheap credit, THEN maintain a balance. Don't do it from the off.0 -
But how can you think your advice is right, when you by your own admission can't get a prime credit card?!?!??!?!?!
What's your point?If somebody wants to build a credit rating, it is so they can get a prime credit card.
Not necessarily: Maybe they want a mortgage or a personal loan to buy a conservatory or a car, etc. etc.My highest APR is 18.9%, and the card I spend on most at 16.5%. I was offered these, despite paying in full. So by paying in full, I can actually do what you do for less cost.
Let's consider the difference between a sub-prime rate of 29.9% and the prime rate of 18.9%. That difference on a balance of £500 off the top of my head is roughly a fiver per month.
But if you're clearing the full balance every month why are you bothered about the APR?0 -
My highest APR is 18.9%, and the card I spend on most at 16.5%. I was offered these, despite paying in full. So by paying in full, I can actually do what you do for less cost.
My bank offered me a 13 month 0% card after paying their standard prime credit card off in full and on time every month. Really I didn't even try to get a 0% card:rotfl:. At the time I didn't know about stoozing, cashback cards and credit files, apart from using a CC sensibly by paying the statement balance off in full and on time will improve your chances of getting a mortgage, which I got approved for one at 22 years old after 3 years of paying off a credit card statement in full and on time.;)0 -
What's your point?
Not necessarily: Maybe they want a mortgage or a personal loan to buy a conservatory or a car, etc. etc.
Okay, I meant prime credit, not credit card, my bad.Let's consider the difference between a sub-prime rate of 29.9% and the prime rate of 18.9%. That difference on a balance of £500 off the top of my head is roughly a fiver per month.
Why is it better to waste £5 a month though? Why not advise these first time CC applicants to pay in full for a little while, take the 'hit' on disposable income at first (as it's no worse than they are now), and then save money on interest going forward.But if you're clearing the full balance every month why are you bothered about the APR?
I actually didn't know what my APRs were, I've gone out of my way to find out for the purpose of this exercise. And out of interest, as I realised I couldn't even make an educated guess at what they were.0 -
Why is it better to waste £5 a month though? Why not advise these first time CC applicants to pay in full for a little while, take the 'hit' on disposable income at first (as it's no worse than they are now), and then save money on interest going forward.
The point is that when we apply it to (monthly) payments the difference between prime and sub-prime is not a lot.
I think that like thebritishbloke you don't have a clue. Bye bye.0 -
So what if it's empty, you don't have to 'fill in all the sections' to show a lender you're responsible with credit.Lastly, my rebuilding of my credit history is not yet fully complete because the loans section is empty.
We're simply arguing that 'rebuilding credit' - whatever beast that is - needn't cost anything. This has been shown to work time and time again. Ultimately the whole aim is to obtain a financial product at a good rate, and for most, that is a mortgage. Why? Because it's cheaper than one with a poorer rate. You start with the products that offer worse rates and over time you get offered the products with better rates.
The raison d'être of 'credit building' is, in the long run, to save money.
There is simply no need to pay anything (ie. interest charges) to work your way up to that point.
I couldn't care less if the APR was 1,000,000%. It doesn't bother me an iota. I will continue to pay my full balance back on time and in full, incur no interest charges, and know that with each payment my credit report looks a bit better for the time when getting credit actually matters.But if you're clearing the full balance every month why are you bothered about the APR?0 -
thebritishbloke wrote: »Please don't listen to Anthorn's advice. He keeps consistently advising people that they should not pay off their balance in full each month, because for some reason he has it in his head that paying interest is a good thing.
There is NO DISADVANTAGE TO PAYING IN FULL. All this does, is save you money and open up more opportunities to you. If a lender doesn't want you because you won't make them a profit on interest, they're not the kind of company you want to do business with.
This is a good post.
I pay mine off in full every month rather than paying the minimum and having to worry about cash not paid.0
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