Building a Score

CurryCee

Hey guys,

I've had my one credit card since Summer 2016, and purposely set my credit limit very low at £1k to test the waters.

Currently, the only two negatives on my Clearscore report are that the credit card limit is low, and my credit card % utilisation is relatively high.

To me, increasing my credit limit seems like a simple fix to improve my score, but I know that increasing a credit limit could be seen as a negative, especially if my current utilisation is high (albeit the balance is cleared in full each month).

I'm hoping to increase my score to move to a rewards credit/charge card, as my current credit card offers me nothing.

Can anyone greenlight my thinking?

Cheers!

FestiveJoy

CurryCee wrote: »

Hey guys,

I've had my one credit card since Summer 2016, and purposely set my credit limit very low at £1k to test the waters.

Currently, the only two negatives on my Clearscore report are that the credit card limit is low, and my credit card % utilisation is relatively high.

To me, increasing my credit limit seems like a simple fix to improve my score, but I know that increasing a credit limit could be seen as a negative, especially if my current utilisation is high (albeit the balance is cleared in full each month).

I'm hoping to increase my score to move to a rewards credit/charge card, as my current credit card offers me nothing.

Can anyone greenlight my thinking?

Cheers!

You deliberately set the credit limit low to, as you said, test the waters.

Now you appear to be using that limit to a high percentage. If you are coinfortable with that, then a credit increase could be the solution, but as you say, that may be seen as a negative.

You could wait a while. Many credit card companies will consider offering you a credit limit if you are seen to be using your card sensibly, especially if you are using a high percentage of the limit and paying it off IN FULL every month.

Or if you cannot wait, why not take advantage of the credit score you currently have and get apply for a different card with a limit you would like. Lots of options out there, for those with bost good and poor credit histories.

Enjoy the festive season reading all about the options in the MSE articles on this site, ... and all about credit scores too

:xmastree::xmastree::xmastree:

Nebulous2

Unless you are on a very low income £1k is a low limit. If you trust yourself not to overspend on a credit card then I wouldn't mess about with lowering limits. Take as much as you are offered, regardless of whether you will use it or not. It shows that companies trust you with their money.

High utilisation is less important if you are clearing it every month.

Ignore the score, try some of the eligibility checkers, and unless you have some real issues like late payments or defaults you may well find you have a good chance of getting a reward card now.

Otherwise there is no harm in asking for a limit increase.

CurryCee

Nebulous2 wrote: »

Ignore the score, try some of the eligibility checkers, and unless you have some real issues like late payments or defaults you may well find you have a good chance of getting a reward card now.

For some reason, in nearly all eligibility checkers I'm eligible for very few other cards. Ineligible for any Amex cards, and ineligible for any from Virgin. Is this likely because of a historically low credit limit?

Nebulous2

CurryCee wrote: »

For some reason, in nearly all eligibility checkers I'm eligible for very few other cards. Ineligible for any Amex cards, and ineligible for any from Virgin. Is this likely because of a historically low credit limit?

Have you tried some of the eligibility checkers direct on company websites, as well as big ones like the MSE one?

I don't think that is because of your credit limit.

Go back to basics -no need to answer these questions here, but as a check for yourself:-

Are you on the electoral roll at your current address?
Are there gaps in your ER history?
Do you have any late / missed payments?
Any defaults?
Do you have other open accounts, like mobile phones?
How long have you held your current account?
Are you employed on a permanent contract?
How long have you been with the same employer?
Any financial associations with others? If so what is their history like?

Credit card companies like stability, known quantities and above all regular payers. No surprises.

cjmillsnun

Amex and Virgin can be some of the strictest in their acceptance criteria.

I would suggest looking at Barclaycard, Capital One, Aqua or Marbles. All do soft searches to check eligibility before you make a formal application. They don't have the same nice low interest rates as some of the others, however if you pay IN FULL every month, this doesn't matter as you will not incur any interest.

CurryCee

I think I've got to the bottom of it using Experian. Apparently, a combination of a low credit limit and high credit utilisation is working against me.

To this end, once I've paid off my balance, does anyone know how many months it'll take before this'll bring my score back in line?

Also, with regards to increasing my credit limit on my current credit card, what reasons should I give for increasing my limit? Will "wanting to remedy my credit score" be seen as a viable reason to increase my credit limit for them?

[Deleted User]

Ignore the score. You can tell people it's whatever number you want. No one will ever know.

Lenders will view you more positively if you're not maxing out your limits. If you want a higher limit, just ask them. They're not likely to interrogate you on it.

But bear in mind, if your limits are too high, that can also deter lenders.

DCFC79

CurryCee wrote: »

I think I've got to the bottom of it using Experian. Apparently, a combination of a low credit limit and high credit utilisation is working against me.

To this end, once I've paid off my balance, does anyone know how many months it'll take before this'll bring my score back in line?

Also, with regards to increasing my credit limit on my current credit card, what reasons should I give for increasing my limit? Will "wanting to remedy my credit score" be seen as a viable reason to increase my credit limit for them?

You ask for a limit increase, no need to mention remedy your credit score, just say its for some big purchases eg a tv for example or multiple purchases.

CurryCee

Deleted_User wrote: »

Ignore the score. You can tell people it's whatever number you want. No one will ever know.

Lenders will view you more positively if you're not maxing out your limits. If you want a higher limit, just ask them. They're not likely to interrogate you on it.

But bear in mind, if your limits are too high, that can also deter lenders.

The score doesn't bother me, so much as not being currently able to access to the best rewards cards.

As I said, I only really set a low limit to test the waters of credit. Had I known a high utilisation would negatively affect my score—despite it being paid off every month—I would have opted for something higher.

CurryCee

DCFC79 wrote: »

You ask for a limit increase, no need to mention remedy your credit score, just say its for some big purchases eg a tv for example or multiple purchases.

Thanks! What would a sensible limit increase be, given that my current limit is £1,000?

Also, do you know how long it may take to get my credit score up once I'm approved for a higher limit?