Using catalogues to improve credit history

Nebulous2

jimbo26 wrote: »

So any borrowing that incurs interest is seen negatively by lenders? Does that include loans, vehicle finance, car insurance etc as well?

Nothing is black and white with the complex algorithms used by lenders. Debt has an impact when assessing affordability, with 50% of salary often being quoted as a ceiling lenders dont like going above.

However - small amounts of interest-bearing debt from sub-prime lenders such as catalogues, being carried over month-to-month, is a warning that the person may be very stretched and using borrowing to fund essential expenses such as food and heat.

Combine that with the OPs previous history and it isn't time to play games. Proving they have addressed the reasons they got into the place they did and paying everything in full is much more useful.

As an aside - I've never liked the idea of paying interest to improve a nebulous concept like a credit score. Credit is a tool to use to your advantage- not something you pay voluntarily when you dont need to. That becomes the tail wagging the dog.