How to build score using a credit card?

Nashwan

Hello. I have a question about mending a bad credit rating using a credit card. I have just applied for a card and been accepted at a £500 limit.

My question is, is it better to borrow a lump (for example, put all my car fuel costs on it) each month and pay it all off that same month, or is it better to borrow on it and make payments for a few months and then pay off the card in full?

Thanks for your time.

glentoran99

Pay it off in full when you receive your statement, otherwise you will pay interest


and ignore your score its irrelevant

Andybez38

Nashwan wrote: »

Hello. I have a question about mending a bad credit rating using a credit card. I have just applied for a card and been accepted at a £500 limit.

My question is, is it better to borrow a lump (for example, put all my car fuel costs on it) each month and pay it all off that same month, or is it better to borrow on it and make payments for a few months and then pay off the card in full?

Thanks for your time.

Try not to use more than half your credit limit for now. It will make you look desperate for credit. Pay your balance off in full each month. Will show you can handle your limit sensibly. A credit limit increase will come after a few months.

Fireflyaway

I got a card for the same reason, withdrew cash to the max and paid back in full. Thought this would show my ability to pay back larger sums but I was wrong. Apparently withdrawing cash rather than spending on it and going up to the limit are both viewed negatively.
Since not withdrawing cash and using less than 50% my score has improved. Low credit utitalisation was specifically mentioned as a positive on my last clear score report. Personally I don't ignore my score. It goes up and down based on my behaviour and I want a mortgage so I will continue to watch it.

DCFC79

Fireflyaway wrote: »

I got a card for the same reason, withdrew cash to the max and paid back in full. Thought this would show my ability to pay back larger sums but I was wrong. Apparently withdrawing cash rather than spending on it and going up to the limit are both viewed negatively.
Since not withdrawing cash and using less than 50% my score has improved. Low credit utitalisation was specifically mentioned as a positive on my last clear score report. Personally I don't ignore my score. It goes up and down based on my behaviour and I want a mortgage so I will continue to watch it.

You do know only you can see the score, it's not a definitive guide to how good your report is.

Nashwan

Andybez38 wrote: »

Try not to use more than half your credit limit for now. It will make you look desperate for credit. Pay your balance off in full each month. Will show you can handle your limit sensibly. A credit limit increase will come after a few months.

Thanks for this. I fill my car twice a week, so I'll probably just use it for petrol and pay it off each payday.

[Deleted User]

Nashwan wrote: »

Thanks for this. I fill my car twice a week, so I'll probably just use it for petrol and pay it off each payday.

No - pay it off by the statement due date. If you pay on every payday, you will eventually get out of sync with your payment dates and get a late fee.

Nashwan

Deleted_User wrote: »

No - pay it off by the statement due date. If you pay on every payday, you will eventually get out of sync with your payment dates and get a late fee.

Yeah, I basically meant I'll pay it off monthly, but yes, you're right of course.

darkidoe

1) Set up a Direct Debit to pay off full balance every month.
2) Spend below your credit limit.

Simple. Low maintenance. History builds with time.

csgohan4

Fireflyaway wrote: »

I got a card for the same reason, withdrew cash to the max and paid back in full. Thought this would show my ability to pay back larger sums but I was wrong. Apparently withdrawing cash rather than spending on it and going up to the limit are both viewed negatively.
Since not withdrawing cash and using less than 50% my score has improved. Low credit utitalisation was specifically mentioned as a positive on my last clear score report. Personally I don't ignore my score. It goes up and down based on my behaviour and I want a mortgage so I will continue to watch it.

Withdrawing cash incurs fees, its noted in the terms and conditions


A mortgage lender doesn't lend based on Equifax or Call credit e.t.c scores, they lend based on their own criteria.


More useful is your credit history like loan, CCJ's debts e.t.c