Improving credit rating - beyond the initial steps

SeduLOUs

Hi all, just looking for some opinions about which accounts to close/keep now that my credit history is beginning to rebuild. When I had a terrible history I took whatever sub-prime cards I could get my hands on and opened catalogue accounts to get as much stuff as I could reporting green ticks to the credit agencies.

My credit file still doesn't look good (one default to fall off in approx 12 months, no late or missed payments in last 3 years) and I'm trying to work towards the 'ideal' in the meantime and not sure about the next steps. I am aware it is 'meaningless' but as an indication, Noddle suggests my rating is only 1/5 currently.

I now have:
Aqua Credit Card - limit still basic £250
Capital One Balance Card - Limit £1000
Capital One Progress Card - Limit £400
Barclaycard Initial - Limit £400
JD Williams Catalogue Account - Limit £1500
Very Catalogue Account - Limit £2000

The plan
Get the Aqua closed this month, and then to consolidate the Cap One cards together at the end of my interest free BT (and keep the interest rate on the progress card, which is currently 20.24% and still dropping). Keeping hold of Barclaycard for now with a view to upgrading it to a 'normal' Barclaycard, possibly Freedom Rewards.

End goal is to get a Santander 1-2-3 or Tesco Clubcard card, but am not quite there yet and haven't been accepted this time around.

The Questions
Re catalogues. Is it likely to have a detrimental effect on my applications to have £3,500 of available credit on those accounts and should I close one or both of them, or are they still worth keeping for now?

Re cards. What do you think is the 'ideal' number of credit cards? I'm aiming to keep 3 accounts open and to get the limits much higher than they are currently as I realise they are still pretty low at the moment.

What is a sensible credit utilisation %age to aim for? I have cleared a few of my accounts, but some are still close to limit as I am currently snowballing (ignore sig figures, they relate to household debt, not personal).

sourcrates

Ideal number of credit cards ? .... "0" in my opinion !!


Why do you need 4 ???


You seem a bit obsessed with your rating, I can understand you want to be eligible for "good credit" products again, and to this end, all you need do is pay your bills on time, and don't have any late payments or defaults registered.


Adding extra borrowing to the mix may only lead to more credit problems in the future.


This next paragraph worries me slightly :


"I'm aiming to keep 3 accounts open and to get the limits much higher than they are currently as I realise they are still pretty low at the moment."


Low is good, why do you want to be in more debt ?

SeduLOUs

I don't want to be in debt at all, but I do want to be able to get a mortgage at some point in the future. You don't get 'good' credit products, without having appropriate history.

Paying bills on time is only one aspect of your history - my understanding is that low limits, too many or too few cards, and either low or high utilisation of limits can all be seen as negative things.

The aim is to get a Santander or similar card to do all of my usual spending on, then pay the balance in full to avoid any interest. The benefits are threefold - I would get cashback on my normal spending, additional interest by leaving my cash in my bank account for longer, and the protection that comes with spending on credit rather than debit cards.

sourcrates

What you say is true, to a point.


Different companies credit score you in very different ways, what's sauce for the goose, may not be sauce for the gander.


And unless you know specifically how a lender credit scores your application, then its purely guesswork.


You will never fulfil all lenders criteria, as they all use different scoring systems.


Having a small amount of available credit, over 2/3 accounts, all paid up on a regular basis, should be what your aiming for to improve your rating.

SeduLOUs

Thanks. I just can't decide which accounts to close down to get the best affect - catalogues or cards!

I know it's all a game and every lender is different, which is why I'm seeking opinions on the best course of action.