Capital one card to increase credit score

mrboni

Thanks all

adindas

Ebe_Scrooge wrote: »

The size and number of transactions on your statement are largely irrelevant. It's a good idea not to run the card up to (or very near) its limit, but as long as you keep the amount on the card below about, say, 85% or so of the limit, you'll be fine.

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What about very near to the credit limit (say about 95%) but you always clear the statemented balance in the following month by DD ??

[Deleted User]

adindas wrote: »

What about very near the credit limit (say 95%) but you clear the statement balance in the following month by DD ??

Then for month A. it will show you used 95% of the balance (say £1400) and this was the statement amount.

Then come month B. it will show that you paid off the £1400, thus cancelling it out.

Utilisation is only "bad" if you continue to carry a balance month on month without clearing in full.

Ebe_Scrooge

adindas wrote: »

What about very near to the credit limit (say about 95%) but you always clear the statemented balance in the following month by DD ??

In theory it shouldn't matter if you use 100% of the available credit, so long as you pay it in full every month. There is a school of thought that says a very high credit utilisation may make you appear reliant on credit for day-to-day living, and hence reflect negatively on your history - whether that's true or not I really don't know. The reason a "buffer" is often recommended is that if, for whatever reason, you don't clear the full amount one month, the resulting interest won't push you over your credit limit.

But you're right, in theory there's no problem with using all of your available credit.

mrboni

Ebe_Scrooge wrote: »

In theory it shouldn't matter if you use 100% of the available credit, so long as you pay it in full every month. There is a school of thought that says a very high credit utilisation may make you appear reliant on credit for day-to-day living, and hence reflect negatively on your history - whether that's true or not I really don't know. The reason a "buffer" is often recommended is that if, for whatever reason, you don't clear the full amount one month, the resulting interest won't push you over your credit limit.

But you're right, in theory there's no problem with using all of your available credit.

And just to clarify, as far as you know I could just spend & pay off £50 or so monthly rather than something much larger, and still gain the same benefit in credit history?

Willing2Learn

mrboni wrote: »

… I could just spend & pay off £50 or so monthly rather than something much larger, and still gain the same benefit in credit history?

As long as you use the available credit each month (any amount within your limit will do), and then pay off the statemented balance in full, before the due date...then your credit history will improve as you proving an ability to successfully manage a credit account

mrboni

easy peasy! :P

Ebe_Scrooge

mrboni wrote: »

easy peasy! :P

Yep. We see many, many posts on here asking about the best way to improve one's credit history (well, people usually erroneously ask "how do I increase my score"), and the answer is almost always "sensible use of a credit card over a number of months".

[Deleted User]

mrboni wrote: »

And just to clarify, as far as you know I could just spend & pay off £50 or so monthly rather than something much larger, and still gain the same benefit in credit history?

Yes. You could spend £1 and it wouldn't make a difference.

Any reference to having a "high utilisation" only applies to those carrying a balance or "techniques to improve your score" (twaddle).