Capital One - Credit card

jord6591

Hi Guys

Just needing some advise. I have a bad credit rating and finally realizing at the grand age of 23 that I need to sort it. I've been to CAB and currently paying off my debts. I applied for a capital one credit card for the sole purpose of using it to build my credit rating, I've only been given a £200 limit to start with but was wondering what's the best way to do this ? From what I've read everybody says that the balance MUST be paid off in full every month! Should I use the full limit every month and pay off or just say £10 or £20 ? Like I said I'm purely using this card just to try and rebuild a good credit history. Many thanks in advance

InsideInsurance

jord6591 wrote: »

Hi Guys

Just needing some advise. I have a bad credit rating and finally realizing at the grand age of 23 that I need to sort it. I've been to CAB and currently paying off my debts. I applied for a capital one credit card for the sole purpose of using it to build my credit rating, I've only been given a £200 limit to start with but was wondering what's the best way to do this ? From what I've read everybody says that the balance MUST be paid off in full every month! Should I use the full limit every month and pay off or just say £10 or £20 ? Like I said I'm purely using this card just to try and rebuild a good credit history. Many thanks in advance

To build good credit you can spend whatever you like each month, obviously up to but not over the limit, and then pay it off in full. Some would argue its better to ensure you spend less than half of the limit and pay it off in full.

You certainly dont want to be paying off just £10 or £20 for a host of reasons

jegudiel

I just wanted to agree with the comments above, but to also add that I would see rebuilding your credit as something that takes years not months or weeks. Why run the risk of carrying a balance (which can have a detrimental effect) when you're just finding your way again? Perhaps you should aim to spend £50-£100 a month on the card and pay it off in full (a Direct Debit can make sure you do); once you've got used to that you can see if that is helping build your credit up or not...OR...why not kill two birds with one stone?

'checkmyfile' provide you access to some dressed up credit reporting information for a monthly subscription...you could sign up and pay that subscription with your Capital One card, so have a recurring payment on the card and see the effect that is having month to month?

Either way, 'good luck' and 'don't stretch yourself just to get a better credit score'.

Paully232000

jegudiel wrote: »

I just wanted to agree with the comments above, but to also add that I would see rebuilding your credit as something that takes years not months or weeks. Why run the risk of carrying a balance (which can have a detrimental effect) when you're just finding your way again? Perhaps you should aim to spend £50-£100 a month on the card and pay it off in full (a Direct Debit can make sure you do); once you've got used to that you can see if that is helping build your credit up or not...OR...why not kill two birds with one stone?

'checkmyfile' provide you access to some dressed up credit reporting information for a monthly subscription...you could sign up and pay that subscription with your Capital One card, so have a recurring payment on the card and see the effect that is having month to month?

Either way, 'good luck' and 'don't stretch yourself just to get a better credit score'.

Personally i wouldn't bother wasting your money doing this when you have financial difficulties at present. Just show you can manage money well by spending on the card things you would normally buy, petrol, groceries, etc and set up a DD to pay the full amount each month. Always makig sure you have enough money in your current account to service the direct debit. Over time your 'credit worthiness' or whatever you want to call it, will improve.

jord6591

Thanks for your advice guys, I think what I'll aim to do is just spend £100-£150 a month (probably grocery shopping) as you've suggested and set DD up to pay balance in full each month. I'm also using a cash plus pre paid mastercard with the credit builder facility activated which has been reported to credit ref agencies for the last ten month as paid on time. I also have a overdraft which is getting reported as paid every month. Any other tips if you wouldn't mind ? Thank you again

System

Use the card when you need it assuming you pay if off each month without fail.

I would suggest ditching the cashplus card once/if your full year is up as it's not going to add much more than a credit card and current account to your credit profile.

jord6591 wrote: »

Thanks for your advice guys, I think what I'll aim to do is just spend £100-£150 a month (probably grocery shopping) as you've suggested and set DD up to pay balance in full each month. I'm also using a cash plus pre paid mastercard with the credit builder facility activated which has been reported to credit ref agencies for the last ten month as paid on time. I also have a overdraft which is getting reported as paid every month. Any other tips if you wouldn't mind ? Thank you again