credit utilization question

OceanSound

I always tend to use an eligibility tool before applying for a credit card. Most lenders now have these. I also use the Clearscore app to see the offers.

It would be great if these tools could be used to check actual APR payable and eligibility for a particular credit limit.

At the moment, only the former is available. Even that only two lenders have signed-up (VirginMoney and CapitalOne):

https://www.which.co.uk/news/2018/09/experian-to-show-real-apr-of-credit-cards/

PixelPound

OceanSound wrote: »

Reducing the credit limit on Halifax Clarity (say by £3000) then asking for £3000 from another provider is not asking to borrow more.

It doesn't work like that, unless it was another card in the same stable. If you apply for a card from another provider they won't say we'll give you £3k as you've reduced your liability.

Halifax is currently offering me 9.9% APR for 3 months on balance transfers. It's good, but I'm aware of other (better) offers out there.

three months isn't long, I can see why this wasn't taken

Dobbibill

I agree with others that reducing your CL is not neccesarily going to achieve what you expect it to.

Continue to keep an eye on Halifax for offers - they normally pop up on your internet banking.
Also keep an eye on Tescos for existing offers/credit limit increase.

Things could change between now and November but lots of applications won't look good to lenders.

OceanSound

Dobbibill wrote: »

I agree with others that reducing your CL is not neccesarily going to achieve what you expect it to.

Okay, so it's pretty much settled that reducing limit is generally not a good idea. It's just that I happen to see this article which prompted me to start the thread, however, there was also another source saying the opposite (which on balance I think is a more credible source).

!!! wrote: »

,,,,,Besides you would need to wait 4-6 weeks after reducing any limits for the banks to update the CRA’s with the reduction before any new potential creditors see the reduction in place.
......

My tesco 0% purchases offer ends on 09 October. I intend to pay the full balance of £2150 before this date (as one should to prevent any interest). How long does it take for the CRA's to be updated once it's paid?

Should I not make any new application until the CRA's are updated and just rely on the offers of existing providers (e.g. Halifax, tesco, MBNA, Barclaycard)?

Dobbibill

Both of the links you provided took me to American articles.

Wait for existing offers if you have made many applications in a short period of time, chance one more if there's been a few months since the last app. Lots of applications/hard searches are going to give the impression to potential lenders that you are credit hungry and desperate.

OceanSound

Dobbibill wrote: »

Both of the links you provided took me to American articles.

Wait for existing offers if you have made many applications in a short period of time, chance one more if there's been a few months since the last app. Lots of applications/hard searches are going to give the impression to potential lenders that you are credit hungry and desperate.

Both of the links you provided took me to American articles.

I've also found a UK source which pretty much says the same as one of the U.S. articles:

https://www.money.co.uk/credit-cards/how-do-credit-card-limits-work.htm

How to lower your credit limit
You can ask to decrease your credit limit if you want to remove the temptation of overspending. It can also help if you want to apply for credit with another provider and think the level of credit you currently have available is too high.

Decide on the new credit limit you would like, but make sure it will be enough to cover your spending on the card. You can then contact your provider to ask them to reduce your limit to this amount.

..... chance one more if there's been a few months since the last app.

Equifax has a record of my Barclaycard app in late August. So, would waiting until late october before next app be enough?

PRAISETHESUN

Lenders look at both the utilisation on a single card, as well as the utilisation across all your cards. From either perspective you have quite high utilisation (~56% total, and 80-90% on 3 of your individual cards) which will hurt you when you apply for credit. I definitely wouldn't be requesting lower limits as this will push your total utilisation even higher and make you look worse to lenders.

I'd suggest use an eligibility checker to see what BT cards you may be eligible for, but you likely wouldn't be expecting much - particularly as it sounds like you've been making a few application recently. I'd be waiting at least 6-12 months between CC applications for the best chance of success

OceanSound

Thanks for your advice guys. Just an update.

I recently applied for two cards (both pre-approved on clearscore). Both were approved. Got £2000 credit limit between them.

Happy with that.

Thrugelmir

OceanSound wrote: »

Got £2000 credit limit between them.

Happy with that.

Sounds as if the net is tightening though. How's the actual debt reduction going?

OceanSound

OceanSound wrote: »

I've also found a UK source which pretty much says the same as one of the U.S. articles:

https://www.money.co.uk/credit-cards/how-do-credit-card-limits-work.htm

How to lower your credit limit
You can ask to decrease your credit limit if you want to remove the temptation of overspending. It can also help if you want to apply for credit with another provider and think the level of credit you currently have available is too high.

Decide on the new credit limit you would like, but make sure it will be enough to cover your spending on the card. You can then contact your provider to ask them to reduce your limit to this amount.

.....

Seems the above money.co.uk webpage has been updated in January 2019, so the above doesn't appear in the article anymore.
Here's the link to the article (pre-update):
https://web.archive.org/web/20170711043354/https://www.money.co.uk/credit-cards/how-do-credit-card-limits-work.htm