using credit card correctly

bushmonkey

Hi. So ive recently just found out that ive been using my credit card wrong. ive been spending alot of the limit and just paying it off hoping that it would show me repaying large amounts and give me good credit score.......................yeah..

So looking about and ive read a few things but would like a more straightforward answer. bear in mind that im only using my card to build a good credit score, i dont have debts or money problems. just credit problems(now)

Should i be spending the 30% of the limit and pay it off in full every month or should i be leaving it, pay a bit of interest one month and pay off the next (then repeat)

Was quite annoyed as ive just been refused car finance and discovered why

Thanks in advance

[Deleted User]

You!!!8217;re doing it wrong by trying to build a fictional number.

What you!!!8217;re doing is fine so long as you repay in full after each statement.

You weren!!!8217;t refused car finance because of your made up score

sparkey1

Pay it off each month and pay no interest. Your mistake is that you are fully using the one card. The credit reference agencies take the balance on the day your statement is produced. I dont know your limits, but this is how it works. Credit limit example £1000. If you spend £900. You will be using 90% of your limit. Credit reports like you to be using 30%. A long time ago, my current account used to pay 8% interest. In those days, the savvy paid their credit card in full on the last possible day to maximise the interest. Nowadays interest is virtually zero. Try this. Continue spending on your card, but pay it weekly. That way your balance will on average be in the 25-30% range. That will benefit your credit score more. Other things to do, take out a 2nd credit card so that you have more available credit limit. Ask for a limit increase. DONT DO ANY OF THIS IF YOU CANNOT MANAGE DEBT! Running up a balance and paying it off is always good. Paying interest for no reason is pointless. Also the amount of interest isn't reported on a credit report, just the actual balance. Your post title using credit card correctly, well thats what you have been doing. Spending up to your limit, and then paying it off. However thats not how credit scoring is calculated.

bushmonkey

@!!! : in this case, they used experian to calculate everything. even had a letter from honda stating this

@sparkey: ok good stuff. i didnt realise i could pay back weekly, i just waited till the bill date. ill get on with doing this.

thanks for the replys

Dobbibill

never pay interest.


use a credit card to demonstrate good, reliable, responsible history of using credit.

use *approx 30 - 40%, set up a DD to repay in full, repeat.

*this means that while waiting approx 3 weeks for the DD to leave for last months statement, you won't exceed your limit.

[Deleted User]

CRA!!!8217;s don!!!8217;t take the balance on the day the statement is produced - they get the balance whenever the lender submits it to them. It varies.

Also don!!!8217;t pay it weekly - only pay it after receiving the statement.

You were refused finance because of another reason.

What other credit do you have? What is your current credit limit? What is your annual salary? How much was the car finance for?

sparkey1

Actually they do. If you take the statement balance, and check it against a credit report balance reported they are the same. The card companies upload in batches thereafter.

[Deleted User]

They!!!8217;re not. They!!!8217;ve never been the same for me. And many other people on here have reported the same in past posts.

It depends what date they submit the data to the CRA!!!8217;s.

sparkey1

The day it is reported is different to the day taken from the snapshot. Go compare your report.

[Deleted User]

I have.

And it doesn!!!8217;t show my statement balance as the balance owing on the account.

sparkey1

Maybe you are the exception to every credit report I have ever seen, or you use a card different to any of the ones I use that follow that pattern. By way of example the balance reported by Equifax today is the statement balance taken from the May Natwest statement.