I got a credit card and I'm kind of scared!

redwarhorse

I got an Aqua credit card with £600 limit but I'm kind of worried.

I got into debt during the recession and it was a nightmare. Ever since I've worked hard to below my means and I'm unattached to anything. I look as if I've dropped out of the world on my credit file.

I got this card to improve it. My sister uses the card monthly to buy stuff and then pays it off on time every month. I'm planning on doing that.

However I have friends coming next week that I haven't seen in years and they're getting married. I also have to pay for job training. If I do that then I'm guaranteed a job at a friends workplace in August.

I'm planning on using £370. In the worst case scenario where I don't get a job it will take me three months to pay it off including the interest. I'm not worried about spending more than £370 because I'm good on a budget and I already paid my rent and bills tills October. I'm just wondering if this is a good idea?

The best case scenario is that I pay it off in a month because my relatives owe me a lot of money. However I don't want to count on unreliable people. Even if I don't get the job I can still pay it off in three months including the interest. Once September comes I still haven't paid it off I can use my student loan to do so.

I thought about this and the £370 is going to be the only big spending I'm doing this summer. After that I will either be working or studying ahead. Once September comes I'm planning on using the card daily and then paying it off in full to improve my score.

Does this look like a good idea? I've got two more years of University and when I leave I want to leave with a fantastic credit score. I don't want employers or banks in the future to think of me as a risk nor do I want to be one of those people who are juggling large debts around. That is still the nightmare that fuels my dreams.

[Deleted User]

If you're 100% sure you can clear it in 3 months max AND it guarantees you a job, then fine. If not, then don't.

After that, use it regularly and clear in full.

But don't focus on your credit score as it's meaningless - just focus on demonstrating good behaviour.

redwarhorse

Deleted_User wrote: »

If you're 100% sure you can clear it in 3 months max AND it guarantees you a job, then fine. If not, then don't.

After that, use it regularly and clear in full.

But don't focus on your credit score as it's meaningless - just focus on demonstrating good behaviour.

Worst case scenario is three months. In September I will get my Student loan and usually after I pay my bills I lend people money. I don't spend much money and I try to avoid it at all costs. So even if my worst case scenario gets even worse I've still got a backup. I'm worrying over this because spending borrowed money makes me worry. I like lending people money but I hate borrowing. My sister owes me £2k and I'm willing to wait for her to pay it off in her time but I can't expect a company to do the same for me.

I focus on my credit score because my past defaults are mostly gone and the last one will be gone by the end of the month. However there is literally nothing else there. I've had a basic bank account from Halifax for 6 years but that isn't even reported there. I've been told having no credit activity is just as bad as having bad credit history.

[Deleted User]

That's fine, but remember your credit score can go in the opposite direction to your behaviour, as it is not based on lender criteria. If you use it as a measure, you may end up taking the wrong decisions.

No one sees your credit score but you. Lenders will only use the data - ie how you manage credit.