credit help.

mark2312

Hi, I'll try to keep this as brief as i can.

Basically my credit rating is pretty poor. I've never defaulted or missed any payments (all that is perfect on my file), and I have just finished paying a £5000 loan off with santander. Again all perfect, no missed payments, no defaults.
I have 2 credit cards, 1 with a £1300 limit currently owing about £900 on it. Minimum payments always met, no defaults. The 2nd has a £1700 limit and currently owe about £1500 on it. Again minimum payments always met, no defaults.

I wanted to take out another loan to pay off a massive chunk of my credit cards (I lost my job a few months ago and relied on them heavily to tide me over, hence them being high) and to get a car now I'm back on track.
I've checked my file and I'm basically a credit risk because I'm close to my credit limit with my cards. Santander have offered me another loan but at a very high 15.9% apr, which is higher than the loan I paid off!!

So my question is, if take out another credit card, transfer the balances of my other 2 onto one card will that improve my rating and hopefully give me a much lower apr as I'll be using a lower percentage of my available credit?? Or will it not make any difference?

According to my file on equifax, noddle and experian using a high percentage on my cards is my only negative on my file.

Any help appreciated
Thanksd
Mark.

[Deleted User]

It could help a little. But paying min payments will be hurting you. Increase what you pay, even if only by a pound.

What are the rates on your cards?

I'd suggest a vist to the DFW boards - you need to cut costs and increase payments more than you need further credit.

mark2312

Sorry should have been a little clearer. I make minimum payments (direct debit) on 1 and on the higher one I always pay slightly over the minimum.
The lower one I pay by direct debit is one I used for a balance transfer 0% apr. I never use that its just for paying that sum off.
The other is a high apr about 17% I think, which is why I want to pay it off.
The credit cards are the only debt I have, but unfortunately need to get a car for work so the loan is pretty essential.

mark2312

This is how Experian put it, "Credit Usage: Using a high amount of your available credit could decrease your credit score
'Available credit' is the difference between your credit limit and how much you have spent on credit. Using a lot of the credit available to you can be a sign that you are struggling with debt. Your Experian Credit Score could change depending on what percentage of your available credit you use. Your combined credit usage is measured, and your management of individual credit accounts. For example, if you have a credit card with a £1000 limit and you have spent £980, this card only has £20 available (2%) which will decrease your score. Using a low percentage of your available credit overall is likely to increase your Experian Credit Score. Your score may improve if you were to reduce the amount of credit that you are using, or if your total credit limit were to increase."

So thats why I'm thinking of consolidating my 2 cards, as then I'll be using a much lower percentage of my available credit. Then hopefully could get a much lower apr on my loan, which would then pay off my card anyway.

[Deleted User]

Remember that your score is irrelevant and Experian's advice should be taken with an enormous pinch of salt.

While another card would lower your utilisation, it will increase your available credit. Too much available credit means you won't get any further credit.

Try one of the soft seearch tools to see the likelihood of getting a loan elsewhere. You don,t need to go with Santander.