Can you still have a decent score/file if you pay lot of interest?

excalibar

Say you withdrawed £700 cash using Capital One Classic Card, I know that charges high interest fees, but what if you pay more then the minmum regularly, never missa payment and don't have any defaults, CCJs etc...Can you still maintaine a decent credit score and file by doing this?

also how long does it take to build up a decent credit file after being in debt for something such as £700?

thanks!

grumbler

excalibar wrote: »

Say you withdrawed £700 cash using Capital One Classic Card, I know that charges high interest fees,

...and the cash advance fee.

but what if you pay more then the minmum regularly, never missa payment and don't have any defaults, CCJs etc...Can you still maintaine a decent credit score and file by doing this?

also how long does it take to build up a decent credit file after being in debt for something such as £700?

£700 is a very small debt that on it's own hardly affects the score. Good repayment history does improve the score. However, cash advances are reported now and, possibly, have a negative effect as generally only the most desperate people withdraw cash from CCs.

Thrugelmir

Borrowing money per se doesn't build a credit score. Everybody has an ok score at the outset if they follow some basic rules. Then going on to manage their financial affairs in a responsible manner. Which opens doors to mortgages etc at a later date.

excalibar

Ok thanks, but if it's negative on credit file withdrawign cash then how can you make it decent and how long does it take to make it look decent, or at least to the stage where lenders won't be bothered about cash being withdraw using CC?

if for example you pay £500 by March or April, and have balance £500 limit left on your Capital One card, does the file look good then? would lenders be put off by the cash withdrawal that happend on November 2014?

stator

If you're looking for a mortgage I would avoid cash withdrawls altogether for at least a year before you apply.
Some other forms of credit are easier to get. I don't know how each lender treats cash advances but I would avoid them altogether if possible. People who take out cash on a credit card aren't managing their money very well.

excalibar

I understand, but my query is at what stage can CC cash withdrawal look irrelavant? am not planning to get a mortage, but maybe a bank CCd in 4-6 months time, provding I have not missed payments and almost have a decent balance what are my chances obtaining a CC bank card?

thanks.

rehanmalik3030

excalibar wrote: »

Ok thanks, but if it's negative on credit file withdrawign cash then how can you make it decent and how long does it take to make it look decent, or at least to the stage where lenders won't be bothered about cash being withdraw using CC?

if for example you pay £500 by March or April, and have balance £500 limit left on your Capital One card, does the file look good then? would lenders be put off by the cash withdrawal that happend on November 2014?

The bottom line is simple, regular cash withdrawals have a negative impact it shows your finances are NOT in good order. The important word here is regular.

The occassional cash withdrawal has no negative impact especially if it is for a large amount and paid off quickly.

YorkshireBoy

excalibar wrote: »

I understand, but my query is at what stage can CC cash withdrawal look irrelavant?

Your "query" will be best answered by a credit card underwriter. Hopefully one will be along shortly...and be prepared to divulge their company's credit scoring criteria!


The best answer you're going to get from anyone here is 'your credit file will improve over time'.


Taking a cash advance isn't always a bad thing in itself...a great many of us do it 3 or 4 times a year when abroad, using Halifax Clarity, Santander Zero, etc. However, the difference between us and you is that we clear the cash balance almost immediately, and certainly within 2 weeks or so. It sounds like your credit file will show you carrying a balance immediately after making a cash withdrawal...for several months...and that will look bad.

excalibar

But I always hear it's better not to pay back all the balance? as it can show that the customer even if they are paying small amoint of interest it still shows they are paying on time and regularly, so this can only help them get their limit increased and enough information on their file to show they make consistant payments, doesn't this help banks to dcide to give them a card? rather then to someone who hardly uses it or someone who always pays in full that the banks don't make anything...

So what people are saying is that credit file and rating can still look good if it shows regular payments albeit cash withdrawal.

Does paying interest by the customer really make your file look bad? and make banks/lenders not give you anything at all?

Can anybody give a rough estimate on when your rating and file is decent enough not to put off lenders/banks in issing your a card?

[Deleted User]

excalibar wrote: »

But I always hear it's better not to pay back all the balance?

The only people who say that tend to live in padded rooms.

PeacefulWaters

Stop over-thinking things.

Get on voters roll.

Pay all bills on time.

Use credit card for purchases but always clear balance in full.

Stick to these rules in life and you'll be fine.