Building credit score

Parva

Hi guys, many years ago I got into a lot of trouble with many credit cards and had many unhappy years with debt and a divorce that was partly rooted with the huge debts I/we accrued.

Fast forward 8+ years and I've found myself being accepted for a Marbles and a Capital One credit card (these were two of my creditors previously).

Now, I'm not looking into improving my credit status to go down that road again and no way on this earth am I going to get into debt that I can't handle, having spent years in fear of losing everything.

History done, where I am at now is running a Goldfish card and a Capital One card. So far, I have made pretty low value purchases on both and paid them off immediately when I got the statement.

Now I know that even the card companies themselves recommend that you pay the balance off and I've no problem with that. What makes me wonder is whether I am doing my credit history more damage doing so?

Will my credit score improve if I continually pay these off in full or would I be better paying the balance minus say £5 just to give them a little interest?

Cheers.

[Deleted User]

Never pay interest you don't have to. Paying off in full will demonstrate you can manage your finances.

But ignore the score. No one sees it but you.

Anthorn

There is no credit score delivered to the lender by the CRA. Lenders have their own methods of scoring. What happens is that you make an application and a lender looks at your credit history. If they just grab a list of statuses then it doesn't matter whether you pay off in full or leave a balance. If they are looking for specific borrowers such as those who have a balance and pay interest or those who make a balance but pay it off quickly or indeed those who clear the balance every month then it starts to matter.

Building a variety of accounts into a credit history will maximise the chances of getting credit but a limited credit history which follows a single track will limit the chances of getting credit. All depends on the lender you apply to and what their criteria are and whether you match up to it.

There are also ongoing credit checks. Some card companies (Aqua, Newday) will look for changes on your credit history before granting a limit increase. But others (Vanquis) just look at the history of the account.

The card companies mainly advise that if the full balance is not paid you will pay interest and if you only pay the minimum payment it will take a longer time to pay off the debt. They do that to be responsible lenders but that really doesn't make sense because they are in the biz to make a profit and it's from interest that their profit mainly comes from.