Using credit card to improve credit score

bigadaj

Yes £300-£400 per month would be fine to build up a decent credit record.

The score you get from experian, equifax or call credit is pretty useless so ignore that.

Use it for normal spending, get teh statement at the end of the month and pay before the due date, the lay net can take time to go through so a few days or ideally a week before th due date might be advisable. This would normally be around two weeks after your statement date as an example.

Direct debit to pay in full every month is the easy way of doing it, the date they take payment can vary from month to month so just make sure there is enough in your account from a few days before and after.

Dobbibill

Don't set yourself a target spend to aim for, just stay well away from your credit limit. Be mindful that if you are paying on the due date then you will have just shy of 2 months spending on the card at a certain time in the cycle as it's rolling from month to month.

Use it as you would normally use a debit card etc, set up a DD to pay in full. If you pay off as you use it then when it's reported to the CRAs it will show a zero balance, so would not be evidencing your responsible spending.

fraser0000

whats your experian score ?

[Deleted User]

fraser0000 wrote: »

whats your experian score ?

It's a meaningless number provided by a CRA.

concernedSaver

That is the only thing I'm unclear on. If spending between £70-£100 per week (on grocery shopping), before clearing balance off in full is enough? Or is it the more you spend and repay in full, the better?

The "rule of thumb" would be to never spend more than 30% of your credit limit. I don't necessarily believe that, but using all your available credit doesn't look nice on your file (it can be interpreted as need for credit and poor budgeting).

I did that with my first credit card, spending 95% of the credit limit each month – and repaying it in full. They never offered a limit increase.

PeterLWilson

I think I should start doing this myself, I very rarely use credit simply because I prefer to pay upfront, but no credit history is a huge barrier if you ever find yourself in a position where you want to borrow,

NurseMoneySaver1122

concernedSaver wrote: »

The "rule of thumb" would be to never spend more than 30% of your credit limit. I don't necessarily believe that, but using all your available credit doesn't look nice on your file (it can be interpreted as need for credit and poor budgeting).

I did that with my first credit card, spending 95% of the credit limit each month – and repaying it in full. They never offered a limit increase.

30%. That's very helpful to know. May I ask where you heard about this rule of thumb?

So my credit limit is only £1000 on this card. So I'm hoping as log as I don't exceed half my limit each month before repaying in full, this won't look bad?!? But I'm interested where the 30% comes from if you could share?

NurseMoneySaver1122

Dobbibill wrote: »

Don't set yourself a target spend to aim for, just stay well away from your credit limit. Be mindful that if you are paying on the due date then you will have just shy of 2 months spending on the card at a certain time in the cycle as it's rolling from month to month.

Use it as you would normally use a debit card etc, set up a DD to pay in full. If you pay off as you use it then when it's reported to the CRAs it will show a zero balance, so would not be evidencing your responsible spending.

So to stay "well away from my credit limit", would it be fair to say around the £500 mark each month on a £1000 limit. Or would you advise less??

MallyGirl

I am sure that £500 pcm would be fine. No one here really knows - it is educated guessing. The main thing is to pay back in full unless you are on a 0% deal - DD is safest.

That being said, I run several credit cards at high utilisation because they are 0% and it has never presented any problems when applying for further credit.

concernedSaver

That being said, I run several credit cards at high utilisation because they are 0% and it has never presented any problems when applying for further credit.

There's a "promotional rate" mark on your credit file that helps with that. Lenders are able to discriminate between a high balance kept on a 0% card (which is different than a high balance that pays interest).