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How to use credit cards to build credit.

karljt2013
Posts: 88 Forumite
I had a terrible time financially in 2010 which left me with about 6 defaults on my credit file. Things are much more positive now and I have been trying to build by credit score back up using credit cards aimed at people with poor credit.
I managed to get a Barclaycard Initial and I now have the maximum credit limit on that card and it is being paid regularly. (Not in full because I read that creditors don't like people who they don't make any money from.)
I then managed to get an Aquacard 6 months later and I have been allowed the maximum credit limit on that as well. It too, is being well looked after.
I am in a financial situation where I could easily take on another credit card so I was thinking about applying for a Tescobank foundation Credit card in June.
However, I read online that it can be HARMFUL to your credit rating if you have too many credit facilities open on your account even if they are being well managed. So it seems like I can't win. I want to improve my credit score, I can easily manage a third credit card yet I would be penalised for this.
Which would be the best path forward. I have also started making plans to contact the creditors from 2010 who issued the DEFAULTS on my credit file but I was disgusted to find out that the defaults would stay on my file for six years even if I paid them back in full the day after the defaults were issued. Anyway I digress. This post is about how to proceed with my next credit card application.
Would it harm my credit file if I applied for, and was accepted for another credit building credit card.
Any advice would be appreciated.
I managed to get a Barclaycard Initial and I now have the maximum credit limit on that card and it is being paid regularly. (Not in full because I read that creditors don't like people who they don't make any money from.)
I then managed to get an Aquacard 6 months later and I have been allowed the maximum credit limit on that as well. It too, is being well looked after.
I am in a financial situation where I could easily take on another credit card so I was thinking about applying for a Tescobank foundation Credit card in June.
However, I read online that it can be HARMFUL to your credit rating if you have too many credit facilities open on your account even if they are being well managed. So it seems like I can't win. I want to improve my credit score, I can easily manage a third credit card yet I would be penalised for this.
Which would be the best path forward. I have also started making plans to contact the creditors from 2010 who issued the DEFAULTS on my credit file but I was disgusted to find out that the defaults would stay on my file for six years even if I paid them back in full the day after the defaults were issued. Anyway I digress. This post is about how to proceed with my next credit card application.
Would it harm my credit file if I applied for, and was accepted for another credit building credit card.
Any advice would be appreciated.
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Comments
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karljt2013 wrote: »I had a terrible time financially in 2010 which left me with about 6 defaults on my credit file. Things are much more positive now and I have been trying to build by credit score back up using credit cards aimed at people with poor credit.
I managed to get a Barclaycard Initial and I now have the maximum credit limit on that card and it is being paid regularly. (Not in full because I read that creditors don't like people who they don't make any money from.)
I then managed to get an Aquacard 6 months later and I have been allowed the maximum credit limit on that as well. It too, is being well looked after.
I am in a financial situation where I could easily take on another credit card so I was thinking about applying for a Tescobank foundation Credit card in June.
However, I read online that it can be HARMFUL to your credit rating if you have too many credit facilities open on your account even if they are being well managed. So it seems like I can't win. I want to improve my credit score, I can easily manage a third credit card yet I would be penalised for this.
Which would be the best path forward. I have also started making plans to contact the creditors from 2010 who issued the DEFAULTS on my credit file but I was disgusted to find out that the defaults would stay on my file for six years even if I paid them back in full the day after the defaults were issued. Anyway I digress. This post is about how to proceed with my next credit card application.
Would it harm my credit file if I applied for, and was accepted for another credit building credit card.
Any advice would be appreciated.
That's only in relation to your credit utilisation rate. 2 cards is nothing, if you want to apply for a third card go for it.I'm a Board Guide on the Credit Cards, Loans, Credit Files & Ratings boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com0 -
don't over think the issues
and don't waste money on interest
use the cards regularly
don't go near the limit
pay in full each and every month
the total amount of credit available isn't a very important figure : many of us have available credit much larger than our yearly incomes and never get rejected for CCs
try for a mainstream card and see how you get on
why do you want to improve your credit records?0 -
Always pay in full each month, unless you have extra money you don't need.0
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karljt2013 wrote: »I had a terrible time financially in 2010 which left me with about 6 defaults on my credit file. Things are much more positive now and I have been trying to build by credit score back up using credit cards aimed at people with poor credit.
Do ex-alcoholics return to the bar for another drink?
Learn to discipline yourself to save before spending. That's the real way to help yourself. Not get drawn back in into a place you've already been.0 -
don't over think the issues
why do you want to improve your credit records?
Because it's like an emergency safety net for the future borrowing isn't it?
Also another poster (Thrugelmir) gave the good advice about learning how to save before dabbling in credit but I have already learned that lesson. When the Barclaycard Intitial was first sent to me it had 6 months interest free so I would ask family members if they could pay for their online shopping with it etc rather than using it myself.
That has helped.0
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