Credit card usage impact

Rocksolid

Hello,

I've used more that the 50% of my credit in the previous month, so 2 of the 3 credit agencies didn't like it and decreased my credit score aprox 10%, big hummer on my head, not sure if is gonna change/revaluated the next month.

I knew that if I had paid (and I paid), it was fine...

My only purpose is to raise my credit score, it doesn't matter in which way I do it, I don't care of the credit, and it was more than clear looking online and talking in the forum that I need to use the cc, many times I've seen that it doesn't matter how much credit I use, but that I pay what I have to pay every month, apparently is not like that.

So, now my question is, the minimum limit is 25% of usage in one credit agency, 50% in another one, what is better to do? Using up to 25% or don't use it at all?

Keeping in mind that if you don't use it for a long time, they remove your cc...

My only purpose is to raise my credit score

Willing2Learn

Try not to worry about your CRA 'credit score'.  A typical lender neither sees nor uses your 'credit score'.  You are the only one who sees it 

Just keep making all your payments in accordance with your agreements.  Then you will be building a record of positive data on your credit files. 

[Deleted User]

You absolutely DON'T need to increase your credit score. If you wanted that, then you should be considering bankruptcy, which is often surprisingly effective, albeit terrible for your credit worthiness.

What you need to do is to demonstrate to lenders you can handle credit. As long as you clear in full each month, your utilisation is irrelevant.

And if you're not clearing in full, get your debt as low as possible.

2e0arr

what is your experian credit score btw ?

Rocksolid

Willing2Learn said:

Try not to worry about your CRA 'credit score'.  A typical lender neither sees nor uses your 'credit score'.  You are the only one who sees it 

Just keep making all your payments in accordance with your agreements.  Then you will be building a record of positive data on your credit files. 

If they really don't care, is better to use it as much as possible then... Do you confirm?

So, the kind of metric they use to asses you is not public.

Deleted_User said:

You absolutely DON'T need to increase your credit score. If you wanted that, then you should be considering bankruptcy, which is often surprisingly effective, albeit terrible for your credit worthiness.

What you need to do is to demonstrate to lenders you can handle credit. As long as you clear in full each month, your utilisation is irrelevant.

And if you're not clearing in full, get your debt as low as possible.

I didn't properly understand the bankruptcy example.

2e0arr said:

what is your experian credit score btw ?

Now is on poor level... Around 680

[Deleted User]

Rocksolid said:

I didn't properly understand the bankruptcy example.

Because the Experian score in particular rewards inertia. Bankrupts are unable to access credit, and therefore are stagnant in terms of credit activity, hence typically earning them a high score. 

Lenders, on the other hand, value active, responsible credit usage.

You generally need to choose between either impressing lenders or the CRAs.

yksi

You need to do more of the things that most lenders like and fewer of the bad things. Unfortunately each lender has a different list. But mostly:
Spend 25% of limit, wait for statement, pay off in full
Have total available credit somewhere around 50-100% of your salary
Be on the electoral roll and keep about 6-12 accounts open, as long as possible, including mobile phones, anything pay by the month, personal loans
Not have CCJs, ARs, persistent debt, defaults or payday loans
Have been in the UK at least 3 years if not 6, in as few addresses as possible

Stop worrying about your score as it is not seen by lenders and is only designed to sell you useless products to increase your useless score. Building your credit history is what matters and it takes time. There are no shortcuts.

Rocksolid

Deleted_User said:

Rocksolid said:

I didn't properly understand the bankruptcy example.

Because the Experian score in particular rewards inertia. Bankrupts are unable to access credit, and therefore are stagnant in terms of credit activity, hence typically earning them a high score. 

Lenders, on the other hand, value active, responsible credit usage.

You generally need to choose between either impressing lenders or the CRAs.

Ok, but the rule of 25% is valid?

yksi said:

You need to do more of the things that most lenders like and fewer of the bad things. Unfortunately each lender has a different list. But mostly:
Spend 25% of limit, wait for statement, pay off in full
Have total available credit somewhere around 50-100% of your salary
Be on the electoral roll and keep about 6-12 accounts open, as long as possible, including mobile phones, anything pay by the month, personal loans
Not have CCJs, ARs, persistent debt, defaults or payday loans
Have been in the UK at least 3 years if not 6, in as few addresses as possible

Stop worrying about your score as it is not seen by lenders and is only designed to sell you useless products to increase your useless score. Building your credit history is what matters and it takes time. There are no shortcuts.

I know few people that have much more than 10k in credit cards (WEIRD)... No issues to get mortgage etc or bad credit score.

In my case I have around 15% of my salary.

I'm still waiting these credit agencies to pull the electoral register of my city...

I'm in UK since neither 1 year, I can't change it .

I took the credit score seriously because I thought that the banks were considering it. Obviously if I apply in my bank, they know much more about me and may be able to get easier a mortgage and probably a better rate, but I just suppose it.

[Deleted User]

Rocksolid said:

Ok, but the rule of 25% is valid?

Not if you're clearing in full, no. 

Rocksolid

I have been penalized a lot by Experian (more than the 10%........), the others improved my score, the usage was much higher than 50% but I cleared always in full.

Or Experian is gonna make another calculation the next month or I simply screwed up, especially when the mortgage will be taken soon.

I don't recommend anyone to follow this strategy to quickly improve the score and show credit affordability.

callum9999

Rocksolid said:

I have been penalized a lot by Experian (more than the 10%........), the others improved my score, the usage was much higher than 50% but I cleared always in full.

Or Experian is gonna make another calculation the next month or I simply screwed up, especially when the mortgage will be taken soon.

I don't recommend anyone to follow this strategy to quickly improve the score and show credit affordability.

You seemed to have accepted that the number Experian gives you isn't used for anything, so why are you still micro-analysing your Experian score?

Whatever Experian recalculates your score as next month will have nothing whatsoever to do with whether you'll be accepted for a mortgage. There is no set rule about what percentage to use each month, but I'd personally argue it makes little difference either way if you're repaying in full every month. Stop worrying and just use your credit card sensibly!