Low Credit Card Limit - Keep or Bin?

Chrisshaw

First Ever Post so here goes
I'm currently looking to boost my credit rating as quick as possible.
Now I have a low credit limit (250) which is a negative on my experian credit report.
I tried to increase the limit but was turned down.
Will it be better for me to continue to use the credit card and just manage it more efficiently? Or to pay it off and remove it?
Any ideas which will have the better results to my credit rating?
Any help would be greatly appreciated
Thanks Chris

StopIt

Why do you want to boost your credit rating?


Only time, and paying off your card in full every month will build your credit profile, which is what lenders look at. Usually CC providers will increase credit limits once a pattern of use is established. Asking for an increase is generally seen as a big no-no.

[Deleted User]

What other cards do you have?

Chrisshaw

I'm looking to buy a house in the next year or so and my credit rating is poor at the moment.

So I should keep it, and have a more structured usage of it?

Chrisshaw

Two current accounts and then just the 1 credit card

[Deleted User]

You have no credit rating. Just credit files.

Having a low rating with Experian just means Experian are not likely to give you a mortgage. Which is good, because Experian don't provide mortgages.

Use the cards you have, clear in full each month. Repeat.

Chrisshaw

Thanks, that was what I thought would be the outcome!
and keep the spending to sensible things ie petrol, phone bill, gym membership those sorts of things.

Money_Rollercoaster

It can be helpful to have the flexibility of a credit card to defer payment of something.


I would be cautious about not spending too much on it every month, however. I know from bitter experience that it is possible to get into a habit of deferring too much of your monthly expenditure and not taking into account that the money needs to be (put by or) available next month to pay for it!

David555

Keep the card, with a lack of credit history your rarely be able to just jump in the deep in and be able to a main stream credit card with a decent limit. Though have a check here and your see your chances https://creditcards.moneysavingexpert.com/?bad-credit&_ga=1.31139263.1809240627.1489599288 Providing you pay off your balance in full every month they will start giving you increases, I believe the first will be on your 4th statment if you've paid back on time in full.

A few golden rules
Pay off in full every month
Never withdraw cash from the cash machines on credit card as it makes you look like you're struggling with money
Ideally spend around 30% of your limit

As time goes by your odds will start to increase of getting a credit card with a much better limit and interest rates.

bolton_joe

Who is your credit card with? Based on the limit I am guessing Capital One, Newday, Vanquis or Tesco Bank. All of these will give you big credit limit increases over time if you keep to your terms and use the card well. Often they will give increases every 4 months if you qualify!! Typically they will reject requests but give you automatic increases easily!

Also having a low limit in no way damages you credit score so I wouldn't worry about that. #urbanmyth