Building credit.

msherry21

Hi all, I'm looking to improve my credit score in as short a time as possible...obviously.
I have just acquired a new credit card and want to know the best way to build my score?

I was planning on purchasing 1 item a month for example but should I go home and pay it off straight away online or let the credit card company take the amount out my bank account at the end of the month? Or doesn't it matter which way i do it?

Thanks.

sourcrates

Good morning !!

Dosent make one ounce of difference.

The only information recorded on your credit file is if you pay on time, or not.

Don't overthink things.

Candyapple

Set up a direct debit to take the full balance every month. If you make a purchase and then say same day or even a week later pay it off yourself, no data is being reported back to the credit reference agencies as it looks like you haven't used your card.

You need to buy something, wait for a statement to be produced and then wait until the DD collects the payment and this gets reported back to the CRAs as you had a balance and it was paid = good.

msherry21

Thank you. That makes perfect sense. Cheers.

Anthorn

msherry21 wrote: »

Hi all, I'm looking to improve my credit score in as short a time as possible...obviously.
I have just acquired a new credit card and want to know the best way to build my score?

I was planning on purchasing 1 item a month for example but should I go home and pay it off straight away online or let the credit card company take the amount out my bank account at the end of the month? Or doesn't it matter which way i do it?

Thanks.

Agree with sourcrates. Doesn't matter for your credit history either way. What matters is that you are keeping to the agreement.

Making a purchase and then paying it off immediately defeats the object of a credit card, i.e. to get credit. You might as well use your bank debit card. Even if you clear the whole statement balance you will benefit from credit from the time a purchase is added to your account and the payment due date.

In fact immediately clearing a purchase could make it look on your credit history like you are not using the card due to a nil balance, depending on the date of the payment compared with the date the lender updates the account at the CRA. Exactly the same could apply if you clear the whole statement balance every month.

msherry21

Hi, so what "Candyapple" is saying is most probably the best way to go? at least the company can see that I'm using the card but the balance is being paid and i'm looking after my account.

Candyapple

msherry21 wrote: »

Hi, so what "Candyapple" is saying is most probably the best way to go? at least the company can see that I'm using the card but the balance is being paid and i'm looking after my account.

Yes.

If you wanted to clear the balance after the statement has been produced by making a manual payment yourself - that is also ok. However, given that one day you may forget/fall ill/emergency happens and it slips your mind - having a direct debit in place saves you from all this hassle.

Just make sure when you set the DD up it is set to take the full balance and not the minimum payment, which is the default option most lenders will opt you in for.