Credit Card limit effect on Credit Score

chubsta

Just a quick question, does your credit card limit affect your credit score i.e is it as good thing to have a high limit or a bad thing?

I have a Nationwide CC with a limit of £13,500, the balance is zero.

I am not intending to use the card for any major purposes or try to get a loan or anything elsewhere so it doesn't really matter what my credit score is, this is just a question as i am interested!

Cheers for any advice...

[Deleted User]

Depends on your balances, income and other data.

But any effect on your credit score can be ignored, as no one sees it. Lenders will view your available credit and take a view on whether it concerns them, alongside the rest of your file.

chubsta

Deleted_User wrote: »

Depends on your balances, income and other data.

But any effect on your credit score can be ignored, as no one sees it. Lenders will view your available credit and take a view on whether it concerns them, alongside the rest of your file.

Thanks for the quick reply - so what is the point of a Credit Score then if no-one sees it? i was under the impression from tv advertising that it is an important thing for many people! Personally i would rather save up or use a 0% buy now pay later and pay before the end of the free term so i have no idea what my credit score is, presumably it is good but who knows?

Oh well, like i said, it is of no importance, it was just something i thought about when i saw an advert last night...

YorkshireBoy

chubsta wrote: »

so what is the point of a Credit Score then if no-one sees it?

There isn't 'a' credit score, ie a universal one, in this country.

There's the Experian credit score.
Then there's the Equifax credit score.
And then there's the CallCredit credit score.
Oh, and there's a Nationwide credit score...and a HSBC credit score...oops, nearly forgot, there's the MBNA credit score.
And not forgetting the Lloyds credit score.
Blimey there are a few aren't there!?

I think the ones I'd pay more attention to are the ones (which of course you'll never see) from those who lend money. Do Experian, Equifax, and CallCredit lend money?

eskbanker

chubsta wrote: »

Thanks for the quick reply - so what is the point of a Credit Score then if no-one sees it? i was under the impression from tv advertising that it is an important thing for many people!

In which case the TV advertising would seem to have done its job! The credit rating agencies like to promote this idea so you spend money with them but the magic numbers they sell aren't anything like as valuable as they portray.

See http://www.moneysavingexpert.com/loans/credit-rating-credit-score for further details....

concernedSaver

so what is the point of a Credit Score then if no-one sees it?

A lender is in the business of lending money, and as any other business they have their target, their policies and their strategy. Some lenders specialise in sub-prime lending (hence the "poor credit" cards), others prefer people with pristine histories, while others are even more specific (targeting a specific demographic with specific needs).

Their needs can't be served by a score calculated by someone else. What they do is taking the whole credit file for an applicant and run it against their algorithms and criteria (there's a great deal of math and statistics involved in that risk assessment), in order to determine how willing they are to do business with you. That's the reason why people with "perfect" credit scores are sometimes rejected for some credit cards or loans, because there's no such thing as an universally perfect profile.

chubsta

concernedSaver wrote: »

A lender is in the business of lending money, and as any other business they have their target, their policies and their strategy. Some lenders specialise in sub-prime lending (hence the "poor credit" cards), others prefer people with pristine histories, while others are even more specific (targeting a specific demographic with specific needs).

Their needs can't be served by a score calculated by someone else. What they do is taking the whole credit file for an applicant and run it against their algorithms and criteria (there's a great deal of math and statistics involved in that risk assessment), in order to determine how willing they are to do business with you. That's the reason why people with "perfect" credit scores are sometimes rejected for some credit cards or loans, because there's no such thing as an universally perfect profile.

Thanks, i understand it a lot more now! Hopefully i will never have to borrow again after the mortgage is paid off so such things credit scores shouldn't bother me but my lad is 21 and getting to the point where he may need a loan etc for a house or credit cards for convenience means at least now I have better understanding of the systems. At the moment his score will be very lows he has never had a card or loan but i guess that won't matter too much as he is working with no debts.

Ebe_Scrooge

eskbanker wrote: »

In which case the TV advertising would seem to have done its job! The credit rating agencies like to promote this idea so you spend money with them but the magic numbers they sell aren't anything like as valuable as they portray.

See http://www.moneysavingexpert.com/loans/credit-rating-credit-score for further details....

As a slight aside - and sorry for hijacking this thread - but it did occur to me when I saw that advert at the weekend, whether the ASA would be interested ? They're making out that your score is important, when as we all know it is meaningless. Wonder if they're breaking any rules ?

MallyGirl

chubsta wrote: »

at least now I have better understanding of the systems. At the moment his score will be very lows he has never had a card or loan but i guess that won't matter too much as he is working with no debts.

It would be worth him starting to build some good credit history with a sub prime card paid off in full each month, or a mobile phone contract.

chubsta

MallyGirl wrote: »

It would be worth him starting to build some good credit history with a sub prime card paid off in full each month, or a mobile phone contract.

He has a mobile contract and has bought a pc on 0% buy now say in 6 months, which he did. Hopefully a few bits and pieces should show he can handle money, he certainly has my mother half and myself keeping an eye on him, we hear so many horror stories of people getting huge amounts of debt and we will do everything we can to stop that.
Perhaps we should get him to get a credit card and then just hold onto it, not let him use it unless it is really necessary.

MallyGirl

it would be better for him to use it regularly and pay off in full - you need to demonstrate good habits