build a Credit rating (Cards)

wang_uk

Hello all.

Wonder if you good people could give me advice on a few things. I am debt free at the moment and saving well, I am interested in building a better credit rating as I only had a loan for 3 years to buld a rating even tho the bank said I got a good rating.

Secondly my other half has an overdraft of £1600 which is giving her a penalty of £16 a month. She seems to think she can pay it of by 12 months 12x16= -£192.

I was thinking if I take out a credit card and take on her debt and she pays me each month I would be building a credit rating.

Views and idea’s please

King regards

Wang

wayoflife

firstly if shes financially linked to you in any way then you need to pay the debt off asap as this will effect your credit rating

the only 2 cards you can transfer an overdreft to are Egg money and Virgin but you need to take into account 2 main things:

1) the APR and balance transfer fees- although almost definately lower than your partners overdraft you need to factor this in. You divided the total payment by 12 which is not right, you need to factor in the interest charges

2) ok so your partner says she can pay it off in 12 months. Have you done a budget? if not the chances are you will not pay it off in the time you will think and you will need to think about this

wayoflife

wang_uk wrote: »

Hello all.

Secondly my other half has an overdraft of £1600 which is giving her a penalty of £16 a month. She seems to think she can pay it of by 12 months 12x16= -£192.

Wang

after reading this more closely the best thing you can do is use a stoozing method with 2 credit cards. One is your Egg Money card one is another card with a good balance transfer offer:

http://www.barclaycard.co.uk/products/apply/platinum222.html

once you have done this you can transfer from the other card to your egg card. Then from your egg card to your partners current account this will clear the debt and you will have a nil balance on your egg card. Then you will have a balance on your other card to pay off

wang_uk

Thank you wayoflife. There are no ties so she wont effect my credit rating.

I also thought about the stoozing after i read about them a few months back. We have worked out that she can pay it less then 12 months

Cheers again

on-the-count-of-three

An additional thought for you.

I've recently done a balance transfer, 0% for 12 months & initally thought like you, divide the balance by 12 & pay off interest free.

But from reading these boards I've picked up another tip.

Open a savings account, I opened a Bradford & Bingley paying 6.4% interest, but I think Martin has recently highlighted another..just do a search on the board for savings.

Then each month set up a direct debit for the minimum payment, usually 2.5% to 3% depending on the card. (£40 to £48 on £1600)

Now set up a direct debit into your savings account for the rest. (£152 to £144) This way the money will be there to pay off your balance at the end of say the 11th month & you will have earned some interest along the way which will go to offset the original transfer fee.

I found Mint very good for a balance transfer..instant online decision during application with facility to set up the balance transfer there & then. (12 months interest free) Barclaycard also good, 14 months interest free..not an instant decision, at least not in my case, but fairly quick none the less. Initial fee on both 2.5% of balance.

wang_uk

ahhh that makes sense. Right to get this straight. I get myself an Egg card and a 2nd card (Lets say HSBC) i do a balance transer from the hsbc to the egg card. The egg card has an account attached to that si i can then move the money for the credit card to the account.

I then do a direct transer for £1600 too the other half account.
now as you said il only need to pay the minamal intrest of say £45 the other £105 put into a savings account.

1600+3%=1648 /11= 149 a month but only pay 45 min needed.
the other 105 put into a account that say has 4% intrest.

Thank you for the reply

wang