Credit Card For Credit Score Building

redux

Anthorn wrote: »

Paying off the full balance every month will not improve your credit history. A history of credit accounts in good order will build your credit history and you have already started that with your Capital One CC. It is arguable that clearing the whole balance every month is actually credit since the balance on that account in your credit history is likely to be always nil.

Have you ever used a credit card? It doesn't sound like it.

When the monthly statement is produced, it specifies a date by which payment must be made, about 20 to 25 days later.

During this time, more spending may occur, which will appear on the next statement.

If the current statement is paid in full, this means the amount on it, not any more, and doesn't also include the further spending in the next 3 weeks after it.

Thus, if spending occurs on several days spread through the month, what you are saying will never be true, not a zero balance, as there will still be an account balance after the statement amount has been paid.

For example, if someone regularly spends £100 each week on shopping and fuel, the balance will increase by about £300 between statement date and payment of about £400, thus the account would fluctuate between about £300 and £700.

For a real case, one of my credit cards has about £150 on it at the moment. The amount due early next month is about £35, by which time the balance might be £200, but I'll still pay just the £35.

Superscrooge

Sean91 wrote: »

Hi Everyone,

Looking on my Clearscore the only negative I have at the moment is not having a active credit card.

My score is pretty poor but I have been pre approved for a capital one credit card at 29.8% APR

I am planning on using this as a fuel card and paying off the balance in full every month, will this

A. Improve my credit score by doing so and

B. Will i incur any interest by paying off the balance in full each month?

Thanks Again

Sean :j

Using a credit card regularly and making the required payments will show you can handle credit responsibly.

I would suggest you set up a direct debit to pay the full amount each month. This will prevent you accidentally missing a payment and you won't have to pay interest.

Don't use the CC for cash withdrawals as these are not usually interest free.

Sean91

Thanks for all the replies.

I have never had a credit card to date.

Currently I have 2 bank accounts showing on my file, however one is in an overdraft of around £850 does this also effect my score?

Like I said I plan on getting the card just to pay for expenses such as fuel and repay in full every month, baby steps to get where I need to be in around 5 years.

Thanks again

[Deleted User]

You have no credit score.

But living in your overdraft will concern lenders

Sean91

Thanks everyone for the advice,

After reading everything I think I will get the CC and pay in full each month.

I also plan to get out of my overdraft month by month.

Sean

EveryWhere

Perhaps a more useful card; aquacard.co.uk/credit-cards/

Advance or Reward are especially useful for your hols and purchasing items denominated in foreign currency.

Since you will pay off the balance in full every month, the Reward card looks a better deal, as you can get up to £100 cashback per annum.