Should I accept increase in my credit card limit?

Yorkie1974

I have one credit card which I pay off in full every months - I have a £2350 limit on it, which is more than enough for my business expenses which I then claim back, and usually spend around £1000 - £1500 on it every month.

I've just seen an article that says that your credit rating will be boosted if you only use 30% of your credit limit. Now, I've been offered many increases but always decline because I don't need it (and I worry about fraud - if someone fraudulently maxed out my card, I'd not end up in financial difficulties if it took a while to resolve).

We're going to be remortgaging the house later this year as we now own a greater equity share, and should be able to get a better rate when our fixed rate expires.

Should I request (or accept) the increases to my credit limit that I've been offered so that I can keep a lower percentage usage to help further improve my credit rating? I'm currently at the top end of 'good' with Experian - not far off 'excellent' which would mean we could potentially access the best borrowing rates.

[Deleted User]

You have a very low limit. It would be a good idea to accept an increase. It shows lenders trust you.

Ignore your Experian rating though as it has no relevance to credit worthiness or borrowing potential.

chattychappy

Agree. Take increases.

The only reason not to would be that it might encourage you to spend more. From what you say, you're "not that type".

I wouldn't worry about fraud. Generally there is no problem with the CCs refunding (and grabbing back from merchants). It becomes more tricky if the PIN was used and they don't believe it wasn't you. Some people allow family members to know the PIN and use their cards. In this case I would keep the limit low, though it's still not a total protection because CCs can authorise transactions that take you above your limit.

Candyapple

Yorkie1974 wrote: »

I've just seen an article that says that your credit rating will be boosted if you only use 30% of your credit limit. Now, I've been offered many increases but always decline because I don't need it (and I worry about fraud - if someone fraudulently maxed out my card, I'd not end up in financial difficulties if it took a while to resolve).

What article was that then? I'd be interested to know where this person got their info from, given that it's a load of baloney.

Yorkie1974 wrote: »

I'm currently at the top end of 'good' with Experian - not far off 'excellent' which would mean we could potentially access the best borrowing rates.

Don't read too much into your 'score'..........
https://forums.moneysavingexpert.com/discussion/5797913

You need to concentrate on what data is shown about you and your partner in your corresponding credit files from all 3 CRAs.

Yorkie1974

It was a Daily Mail piece apparently showing how Experian calculate your credit score:
http://www.dailymail.co.uk/money/cardsloans/article-5414557/Forget-pay-bill-hurt-credit-rating.html

The extra 90 points would catapult me right to the top of Experian's ratings, and whilst I know that the score is actually only to give me an indication, if the credit report would be better, it might be worth doing.

[Deleted User]

For many reasons, you can thoroughly ignore anything the Mail writes about credit scores.

Or writes in general.

molerat

Yorkie1974 wrote: »

It was a Daily Mail piece apparently showing how Experian calculate your credit score:
http://www.dailymail.co.uk/money/cardsloans/article-5414557/Forget-pay-bill-hurt-credit-rating.html

The extra 90 points would catapult me right to the top of Experian's ratings, and whilst I know that the score is actually only to give me an indication, if the credit report would be better, it might be worth doing.

How much will Experian lend you based on their score ?

Yorkie1974

Molerat - absolutely none, but even a half percentage reduction in my mortgage would be a significant saving. None of what I was proposing would cost me anything, but if there is a chance of getting a better mortgage deal, I don't mind making a phone call or two.

molerat

Yorkie1974 wrote: »

absolutely none

One reason why you should ignore their score

Yorkie1974 wrote: »

but even a half percentage reduction in my mortgage would be a significant saving. None of what I was proposing would cost me anything, but if there is a chance of getting a better

Your Experian score has no bearing on the amount and rates of what anyone will lend you. We have bankrupts on here with 999 scores !

Candyapple

Yorkie1974 wrote: »

It was a Daily Mail piece apparently showing how Experian calculate your credit score:
http://www.dailymail.co.uk/money/cardsloans/article-5414557/Forget-pay-bill-hurt-credit-rating.html

The extra 90 points would catapult me right to the top of Experian's ratings, and whilst I know that the score is actually only to give me an indication, if the credit report would be better, it might be worth doing.

Clearly you didn't read any of the links in the thread I posted. :wall:


Experian admit credit score pointless:
https://forums.moneysavingexpert.com/discussion/4858881

Proof that credit scores are rubbish:
https://forums.moneysavingexpert.com/discussion/5794196

Mortgage advisor saying credit scores are meaningless:
https://forums.moneysavingexpert.com/discussion/5659874

Bankrupt and with 999 score:
https://forums.moneysavingexpert.com/discussion/4099257

Post #10 on this thread:
https://forums.moneysavingexpert.com/discussion/3158508

And another one:
https://forums.moneysavingexpert.com/discussion/5663181

Experian says a CCJ will take off around 250 points, while defaulting will knock off around 350 points.

That is hilarious how a default is classed as worse than a CCJ :rotfl::rotfl:

Yorkie1974

Candyapple wrote: »

Clearly you didn't read any of the links in the thread I posted. :wall:

There is an incredible amount of conflicting information - it is difficult to know what to believe, and given that the MSE Credit Club includes free access to your credit report and score, you will forgive me for believing that it is not entirely meaningless.

Candyapple wrote: »

That is hilarious how a default is classed as worse than a CCJ :rotfl::rotfl:

My understanding is that you can't get a CCJ for a debt on unsecured lending until you have had a default, so I can understand why that might be the case.