Sup-prime cards and rebuilding

MerchantMariner

Hi all,

I am (relatively) newly debt free, with multiple defaults, all about three years old and all fully satisfied.

I have a good income, and hope to buy a house in 3-4 years. While waiting for the defaults to drop off I'd like to get my credit history back into better shape.

I got a mailing through from Aqua (a previous creditor) and applied on a whim, not expecting to be accepted. But I've been accepted. I also tried my luck with Barclaycard Initial and got accepted. (£400 limit on the BC, unknown on the Aqua). This is a huge surprise to me as I didn't expect to be accepted for anything for a long time.

I don't intend to do any more applying - I know that looks bad - and after the last few years I have no intention of getting back in to debt. I have a significant amount of savings built up now.

So I was wondering what the best way to operate these cards would be to rebuild by credit history? I plan to pay off in full each month, but how much should I spend on the cards? As a percentage of the limit?

Any other tips would be appreciated. I assume a good history on two cards is better than on one but at some stage I would like to move away from sub-prime lending. How long should I wait before trying for a "normal" card?

Thanks!

MM

InsideInsurance

There are no absolute rules in credit scoring and so there are no "right way" to do these things. Most cautious approach would be to spend no more than 50% of each cards limit and pay off in full each month.

As how long to wait? 6-12 months would be the normal baseline for someone who's issue is lack of history. May get something quicker with those that know you (ie your bank or card issuer) but others may want to leave it longer. It will obviously also depend on what the rest of your history though and the other non-history rating factors (time with current employer etc)

Some lenders seem to be more sensitive to outstanding balances than others so you may want to stop spending, clear the cards and wait 2 months before applying for another one if you wanted to be the most cautious

thebritishbloke

To be honest, I'd say to cancel the Aqua card already. Stick with the BarclayCard, and in 6 months time you might be able to get them to upgrade you to one of their better cards.

Pay it off in full each month, don't spend more than 30-50% of the credit limit.

MerchantMariner

Thanks InsideInsurance and britishbloke.

To be honest, I'd say to cancel the Aqua card already. Stick with the BarclayCard, and in 6 months time you might be able to get them to upgrade you to one of their better cards.

I did think that, and that's what my partner has suggested. Given the goal (at the moment) isn't necessarily to get more/cheaper credit but to build a history, wouldn't two accounts be better than one? Or is the fact that it's Aqua a bit of a red mark in itself? If I do cancel the Aqua card now (accepted 2 or 3 days ago) will they just cancel and treat it as if the account was never opened?

leeroy2009

stick with the Barclaycard, keep the account in order - they will upgrade you to a platinum and reduce the apr in the future and most likely you will then start to see balance transfer offers on the Barclaycard account, barcalycard can be a credit card for life.


aqua will close the account, the search will stay on your credit file, as you have 14 days to cancel the aqua im not sure if it will be marked as settled at the cras or simply not appear at all.