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Finance impact on credit score

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Finance impact on credit score

13 replies 295 views
Hello,

I'm wondering how much it could impact a finance plan of around (700 pounds) on my credit score.
2nd question is how much it will impact if there are interests, for example around 5% (not really worrying)

The point of these 2 questions is because I would like to buy few items, but for now let's count 2 (1440 pounds), and split the payment just to make myself extremely comfortable, otherwise I can easily pay straight.

As I see online, taking a credit card for this purpose is a good choice for the credit score, paying obviously before they charge interests, and it's visible in my credit history, but I can't use the cc for this amount, so I'm evaluating the finance but I'm not sure about the impact.
Do they consider that I haven't they money to buy the items now?
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Replies

  • RocksolidRocksolid Forumite
    143 posts
    100 Posts
    Other questions would be, will it impact if they perform an hard credit check (quite sure of it)?
    Or if they report to the CA that I have a finance with them + the value?
  • zx81zx81 Forumite
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    Ignoring the score, because we've covered that in depth in your other threads, any revolving debt is general a negative, although a 0% debt much less so.
  • edited 11 February at 12:46PM
    RocksolidRocksolid Forumite
    143 posts
    100 Posts
    edited 11 February at 12:46PM
    What do you mean 0% debt?

    What about in case I pay it every month in time? For example, my telecom plan appear in my credit report, but my balance every month is 0 because I pay always, in case I pay the finance always, will that appear? In case appears, I know it will impact in somehow
  • zx81zx81 Forumite
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    0% means 0% interest. 

    Clearing a card in full each month shows good affordability. If you have it at 0%, you don't necessarily need to clear each month. But if you're paying interest, it shows you have no disposable income.

    Your telecom account is different as it's a rolling monthly contract.
  • DCFC79DCFC79 Forumite
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    Part of the Furniture 10,000 Posts Name Dropper
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    A credit card with 0% for purchases would be ideal.
  • RocksolidRocksolid Forumite
    143 posts
    100 Posts
    Yes, I have 2 cc with 0% purchase, but not transfer, obviously up to 2 months aprox, after I pay interests.
    What about a a car insurance? Is it seen as a finance if I pay it monthly?
    When I've done my first car insurance, the price with interests was much higher, something like 20% in the end of the year, it was crazy...
    Now is my 2n year, the amount is few pounds more if I pay monthly, considering also that it will cost the half it's really something I'm looking for to reduce my one off expense for the car insurance, but no idea how much can impact on my score.

    Or moreover, how much it will impact my following request for a finance for 2 objects of 700 pounds...
    Considering that it won't impact my monthly income.
  • zx81zx81 Forumite
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    If you can afford to pay your insurance upfront, then do so.
  • RocksolidRocksolid Forumite
    143 posts
    100 Posts
    zx81 said:
    0% means 0% interest. 

    Clearing a card in full each month shows good affordability. If you have it at 0%, you don't necessarily need to clear each month. But if you're paying interest, it shows you have no disposable income.

    Your telecom account is different as it's a rolling monthly contract.

    Hi, old discussion, but the contract it's not monthly, it's one year contract paid monthly, so the same as a finance, probably it's reported differently to the credit agencies.
  • zx81zx81 Forumite
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    No. It's a rolling contract, but with a minimum term tif a year.  

    It has no fixed end date.
  • SaundjaSaundja Forumite
    1 posts
    First Post
    MoneySaving Newbie
    I have had to cancel home insurance policy as my house move on 1/4 has been postponed due to corona virus. Can the credit search be removed in these circumstances?
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