Should I extend or reduce my credit?

MaryLegs_

Hi all! Look for advice in credit in two parts:

PART ONE: I have a Capital credit card (for people with bad credit ratings) currently spending strictly no more than 25% each month and paying it off in plenty of time in order to gradually help my credit rating. They have now given me the option to extend my credit from £750 to £1k. Is there any reason I shouldn’t do this? Am I wrong to think that the more credit a company makes available to you, the better you appear to lenders? 

PART TWO: I’m finally out of my overdraft so should I get rid of it? Again, am I right in thinking the more credit you have available to you - the more attractive you are to lenders? I’ve read on other posts that paying off your overdraft one bit at a time can actually detract from your credit rating so I’d been waiting to either slash it all in one go or leave it and just not use it. 

Thank you in advance!

D3xt3r5L4b

You can spend as much as you like each month if you’re paying off in full - ignore the CRA’s “advice” that you shouldn’t spend more. 

Accept the limit increase and any future one they offer. 

If you don’t need the overdraft then close it.

And remember you’re not improving your “score” or “rating” as lenders don’t see them or care about them.
Good account conduct means an improved credit history which is your goal here. 

PRAISETHESUN

Personally I'd keep any additional credit you're offered - it will show other lenders that you can be trusted with higher limits. Additionally, utilisation doesn't really matter if you're paying off in full but if your current arrangement works for you then keep at it. At the end of the day all you really need to do is demonstrate you can manage your credit account(s) responsibly, and this will improve your credit history over the longer term.

Malkytheheed

D3xt3r5L4b said:

You can spend as much as you like each month if you’re paying off in full - ignore the CRA’s “advice” that you shouldn’t spend more. 

This. Is. Not. True. 
If you have £1000 limit and spend £1000 a month and clear IN FULL by DD every month. Your usage will, show 100% usage of avalible credit. Not good in the eyes of a lender. Obviously if the lender looks closer they will see you are paying everything off each month. But it still shows that you are maxing out your card/s every month and it makes lenders nervous. 


You always pedal this falsity. As you did with your previous banned account. 

D3xt3r5L4b

Malkytheheed said:

D3xt3r5L4b said:

You can spend as much as you like each month if you’re paying off in full - ignore the CRA’s “advice” that you shouldn’t spend more. 

This. Is. Not. True. 
If you have £1000 limit and spend £1000 a month and clear IN FULL by DD every month. Your usage will, show 100% usage of avalible credit. Not good in the eyes of a lender. Obviously if the lender looks closer they will see you are paying everything off each month. But it still shows that you are maxing out your card/s every month and it makes lenders nervous. 


You always pedal this falsity. As you did with your previous banned account. 

No - because the following month it will show the amount paid was the amount “utilised” the previous month so it balances out.

If you have a small limit, say £500 and you’re putting your monthly expenditure on it (shopping, petrol/travel etc.) then you’re likely to (nigh-on) max it out. But if you pay in full it’ll “cancel out” the utilisation the next month.

Ergo there is no issue.