Your opinion: my next steps to a sound credit history.

ryuuoo

Hi there everyone,

I opened this thread to ask for your points of view as to what I should do next regarding my credit options.

I am 20 years old, am studying but have a job as a waiter (hours vary 30-35 pw) in Central London.

Last May I started my financial history by opening my first bank account with Barclays then in September I opened a basic bank account with HSBC and then in December I got accepted for a Barclaycard (Freedom Rewards) with a 250 gbp credit limit.

Two weeks ago I asked to get an increase in my Barclaycard up to 500 and that went through too...

I am wondering as to what I should do next... keep putting all my expenses on the Barclaycard and wait... or get another credit card... ?

I am also thinking about closing my Barclays bank account and try to get upgraded to a Current Acc with HSBC instead of the Basic Account I have at the moment...

What would you do?

Thanks for your time

redpete

put spending on BC and pay it off each and every month. I wouldn't bother opening any more current accounts to improve your history - but it might be worth it for the offers.

thebritishbloke

What's wrong with your normal bank account at Barclays? Or would you prefer to bank with HSBC?

I wouldn't keep asking for credit limit increases. I'd just set up a direct debit to pay off your BarclayCard every month. Never spend more than 30% of the credit limit. BarclayCard will up your credit limit periodically, then in the future you can move on to better cards.

ryuuoo

Thanks for both your opinions... Theres nothing wrong with Barclays but I would 'prefer' to bank with HSBC...

I already have a Direct Debit set up for my BC so it has always been paid off in full...

Why would you not recommend spending more than 30% of the limit on it?

So... Stay with the BC for the next year or so?

thebritishbloke

ryuuoo wrote: »

Thanks for both your opinions... Theres nothing wrong with Barclays but I would 'prefer' to bank with HSBC...

I already have a Direct Debit set up for my BC so it has always been paid off in full...

Why would you not recommend spending more than 30% of the limit on it?

So... Stay with the BC for the next year or so?

One of the things that lenders look at is credit utilisation. If someone is using 99% of their credit limit, it looks like they're spending too much money. Even if this is only them having a £100 limit and spending £99. Someone could have a £10,000 limit and spend £3,000 and it doesn't look as bad to lenders (usually).

Yeah I'd just stick with the BarclayCard and give it 6 months, then have another go at applying for a card somewhere that you want. BarclayCard will probably up your limit by then too.

InFi[D]eL

You seem to be in a good position. However having too much gloup in the Financial pot can be preventative. You do not want too many cards or accounts as this can potentially set off alarm bells to lenders. If you have rnadom current accounts you're not using, whack in £150 - £200 and then leave it alone. It will just look like some sort of emergeancy or back up fund and likely be ignored when lenders look over your credit file later. Empty current accounts or more than one current account in active use is a bad thing.

Something allot of people forget about for bolstering your credit file is a Contract Mobile telephone. This is a surprisingly good way to demonstrate an ability to control finances by maintaining a contract with o2 or such and keeping it in good standing.

As for your current credit card, keep the usage below 50% and pay it off like a ninja.

You're an ideal candidate for future lending if you take your time and be careful now I wish you all the best.

-Kane

jakesuk

InFi[D]eL wrote: »

If you have rnadom current accounts you're not using, whack in £150 - £200 and then leave it alone. It will just look like some sort of emergeancy or back up fund and likely be ignored when lenders look over your credit file later. Empty current accounts or more than one current account in active use is a bad thing.


-Kane

I don't think a potential lender would see any difference between a current account with a zero balance and one with £150. A lender can see when you're in your overdraft but all my current accounts never show the positive balance on my credit reports and I've banked with several different institutions over the years. They simply show as zero balance regardless of the fact I have a positive balance and a zero balance just indicates I am not overdrawn.

Note that clearly if you apply for a credit card with the same institution that you bank with then they know everything but that knowledge doesn't come from data on your credit report.

Please correct me if I'm wrong.

InFi[D]eL

jakesuk wrote: »

I don't think a potential lender would see any difference between a current account with a zero balance and one with £150. A lender can see when you're in your overdraft but all my current accounts never show the positive balance on my credit reports and I've banked with several different institutions over the years. They simply show as zero balance regardless of the fact I have a positive balance and a zero balance just indicates I am not overdrawn.

Note that clearly if you apply for a credit card with the same institution that you bank with then they know everything but that knowledge doesn't come from data on your credit report.

Please correct me if I'm wrong.

Actually I think you're right.

I was going from memory of when I banked with Halifax and also has a Lloyds current account back from when it was just the TSB. The balance of the Lloyds account was available when I applied for and was awarded a HALIFAX Credit card. Of course that was direct and not from the credit file so ignore me blonde moment there.

Thrugelmir

If you require credit for a major purpose. Obtain a loan and repay it to terms. Don't use revolving credit on your cards.