How can I improve my credit rating?

will369

Hi guys,

In a few years time I will want to purchase my 1st.

Wether I get a mortgage, or go down the help to buy scheme, I am not sure yet.

I am 23 years old and have a bad credit rating.

Years ago I would always miss payments and take payday loans out.

I am debt free now, I only have my student loan of £5000 which I pay monthly.

Any idea on how I can improve my rating?




Regards

[Deleted User]

First all, I would suggest blanking out your personal details from that screenshot.

The best way to build a good history is to use a credit card and repay in full each month.

will369

Deleted_User wrote: »

First all, I would suggest blanking out your personal details from that screenshot.

The best way to build a good history is to use a credit card and repay in full each month.

Not sure if my bank will allow me to have one.

Tixy

If your own bank won't accept a credit card application from you then consider applying for a subprime credit card. See here - http://www.moneysavingexpert.com/credit-cards/bad-credit-credit-cards

These usually have small limits and high interest rates, but if you always pay in full each month then you won't be charged interest.

Using a card in that way will help you demonstrate a history of responsible use of credit.

I would remove the graphic altogether from your original post.

will369

Thanks,

The pic contains my name and a reference number......

will369

iv been accepted!!




Can I spend the £1000 limit in one go and pay off the minum amount monthly....will that help my credit rating?

[Deleted User]

No. That would be the worst of all worlds.

Don't get anywhere near to maxing the card out. Just use it regular shopping, then pay off in full each month.

will369

So maxing it out, and paying it off monthly wont improve my score?

Tixy

will369 wrote: »

iv been accepted!!




Can I spend the £1000 limit in one go and pay off the minum amount monthly....will that help my credit rating?

You could do that.
For most lenders that wouldn't look as good on your credit file as making purchases each month and repaying in full, or even making a large purchase and then always paying more than the minimum each month.

Generally paying just the minimum may be interpreted as someone who is struggling with their finances.
And maxing out a limit may be interpreted as someone who is struggling or irresponsible with credit.

And if you don't pay in full each month then you will be charged interest each month (unless the card has a promotional period for purchases at 0% interest).

Tixy

will369 wrote: »

So maxing it out, and paying it off monthly wont improve my score?

Improve your score that a credit reference agency will sell to you? - yes it might a bit.

Improve your chance of being accepted for other credit products in the future? - probably not.

will369

I dont plan to max it out, but if I do, I could pay more then the minumum each month, was just wondering if that was ok.