Credit building help?

titchyyyy

Hello.

I've been given my first credit card, it has a small limit on it and I'm just wanting to literally build my credit up.

Does anybody have any tips for the best way to use a credit card to achieve this?

I was told to make a few small purchases each month (30% of the limit) and pay it off in full before any interest gets added and that would show up on my report as a positive.

Is it as simple as this? Is it better to make the full payment of the balance or should I be doing the minimal payment to show I can keep it up?

Thanks for any advice.

[Deleted User]

What do you mean “given”?

Did you apply for one yourself and you’ve been accepted?

Don’t work on building a fictitious score or rating - work on building a credit history.

You’re right in your thinking - use it for your normal monthly spends (ignore using only 30%) then pay it back in full each statement month.

cymruchris

Set up a direct debit to take your full balance monthly if you can. If you're with one of the credit building cards such as Vanquis, capital one or aqua - if you keep this up for several months to a year - they'll increase your limit. Everybody is different. I had an Aqua card with a £400 limit that was raised to £1700 within 4 months of opening the account, a Vanquis card that went from £400 to £2000 after 11 months, and a Capital one card (the slowest) from £400 to £550 in 10 months. I use my cards often for small purchases - and always clear the balances in full. Never pay interest as a result of course.

Once you've had your first card for 6-12 months, you can try one of the above that you don't have through their eligibility checkers if you want to expand the number of accounts you have.

titchyyyy

Thank you for all the advice, have noted it down!

LordSmug

Martin always seems to advocate paying credit card accounts off IN FULL every month
(unless you are maximising the advantage of say a 0% interest rate promotion)

PRAISETHESUN

As above - ignore any reference to your credit "score" or "rating". Your aim here is to build solid credit history, demonstrated through managing credit responsibly by paying it off in full and on time.

My first credit card had a £250 limit and I just made a few purchases on it (fuel, groceries, etc) and paid it off in full every month. Doing this will demonstrate that you can manage credit responsibly over time. There is absolutely no gain from paying only the minimum balance, and with the horrendous APRs of credit-building cards you really do not want to be paying interest anyway - you do not need to spend any money (apart from buying things you'd already be buying with a debit card anyway) to build your credit. After 6-12 months you may get a limit increase from your provider, but if you're anything like me the easiest way to get a better limit is to actually apply for another card elsewhere - I've only had one limit increase on my first card in the last 2 years (from £250 to £450), but other cards that I've subsequently applied for have given me several times that limit off the bat when I first applied for them!