Credit Building for the first time, cards and advice?

VII_UP

Hi all, firstly thank you for looking at my thread!

My question surrounds building credit for the first time as a recent student who has just secured a full time job, I have been a long-time lurker on the forum and have some understanding but would be eager to know more and learn.

I have taken out my first credit card with the usual high interest and £1K limit with the aim of making small purchases I know I am unlikely to need refunds from, and paying off the balance in full every month. Up to now I have been financially disciplined enough that while I had little credit history, I dipped into a student overdraft which means I have SOME credit history that is entirely paid off and was able to secure the card.

As a result, I have a hard search on my report and have been trying to learn more about credit scores and gather I may need a bigger credit utilisation than first planned. With this in mind, what would you suggest regarding how much of my balance I actually use (And pay off in full every month), and also should I consider a second credit card in order to have higher total credit? 

Any and all advice would be extremely appreciated, I don’t need to worry about not paying off the debt as I stashed the majority of my part-time student job earnings in a savings account. 

Thank you in advance!

-VII UP

[Deleted User]

As long as you're clearing in full each month, use as much as you need.

Two or three cards is always a good idea, but no need to rush it.

The only thing you need to know about credit scores is to ignore them. Sensible financial management is all that's needed. Clear in full each month, make your payments on time, don't revolve debt unless absolutely necessary or at least on a 0% promo.

kimplus8

No would get your weekly/ monthly shop on your credit card at the supermarket and pay off in full each month. Do a budget and be strict, you are young so now is the time to be really smart with your money and save for later. 

Run your credit card well and save a good amount, stay in a decent job without employment gaps and it will all look good for your future if a mortgage is your aim

VII_UP

Just to add, I really don't NEED any more credit as I have no big purchases planned. It's purely from a cost/benefit perspective with increased credit history building from two cards versus additional hard searches. Thank you!

VII_UP

Deleted_User said:

As long as you're clearing in full each month, use as much as you need.

Two or three cards is always a good idea, but no need to rush it.

The only thing you need to know about credit scores is to ignore them. Sensible financial management is all that's needed. Clear in full each month, make your payments on time, don't revolve debt unless absolutely necessary or at least on a 0% promo.

Thank you for such a prompt and descriptive reply, I read online many recommendations about not going over X% of my total balance are these guides just to be avoided then? To be perfectly honest I am going to struggle to use a significant chunk full stop but would try to make the bigger purchases on it.

Could you explain what you mean by revolving debt? Is this a point against having more than one card?
Thanks again!

VII_UP

kimplus8 said:

No would get your weekly/ monthly shop on your credit card at the supermarket and pay off in full each month. Do a budget and be strict, you are young so now is the time to be really smart with your money and save for later. 

Run your credit card well and save a good amount, stay in a decent job without employment gaps and it will all look good for your future if a mortgage is your aim

Thank you for taking the time to advise, definitely looks like a bigger purchase will be beneficial to me in the long-run! Fortunately, I only have the coronavirus employment gap as I decided to leave and finish the Uni year without a job in February and it was certainly helpful. Is your employment history visible to CC companies? Sorry if that seems like such an obvious question.
You've hit the nail on the head with the mortgage aim while considering a Masters degree the idea of having no hope of a mortgage until I'm 40 was terrifying! 

[Deleted User]

Utilisation is only an issue where the debt is not being cleared.  ie "VII_UP is using 90% of their credit limit and it never seems to go down - they must be desperate for credit because they're maxing out everything they have." Clearing in full just shows that you use the card instead of paying directly from your current accounts, where you already have the money available.

Revolving debt means debt that you don't clear, but carry on to future months.

Having more than one card shows that more than one lender trusts you with a card. But jst as importantly. at some point your current card will not be accepted, or be blocked, or could even be closed.  Having two or three back ups is therefore a sensible idea.

VII_UP

Deleted_User said:

Utilisation is only an issue where the debt is not being cleared.  ie "VII_UP is using 90% of their credit limit and it never seems to go down - they must be desperate for credit because they're maxing out everything they have." Clearing in full just shows that you use the card instead of paying directly from your current accounts, where you already have the money available.

Revolving debt means debt that you don't clear, but carry on to future months.

Having more than one card shows that more than one lender trusts you with a card. But jst as importantly. at some point your current card will not be accepted, or be blocked, or could even be closed.  Having two or three back ups is therefore a sensible idea.

This is a lot of useful information, thank you for explaining! I had many misconceptions about utilisation. 
It certainly looks like a second card would help, should I wait for 6 months until the hard search clears when considering my little history prior?
Due to the terrible rates, I would be forced to go with one of those 59% Vanquis cards so am happy to wait for the hard search to clear if that is best, but am well aware proper financial management means I will not pay a penny. 

VII_UP

One more, I believe the answer is yes:
If I am paying off in full; with no revolving debt, is my score likely to increase at a greater or equal rate to those who pay the minimum balance? 

[Deleted User]

Apply now - if declined, leave it a couple of months before retrying.

Use an eligibility checker to see what you might get.  There's nothing wrong with a high APR rate card because, as you say, you won't be paying interest.   But more mainstream cards will give you a higher limit, which paints you in a better light.

Malkytheheed

Probably the most sensible first time poster I have ever seen!