Building Credit Score

DebtFreeWannabee95

Hello! I hope that you’re all well. 

I posted just over a year ago, as a bad split from a previous partner left my finances all over the place. However, with some good negotiation with partial final settlement offers, I’ve got the £13k debt down to just over £2k, which is great. 

Today, I paid off my Aqua credit card, now having a zero balance.

You’ll have to excuse me, as I’m not ‘with it’, when it comes to using credit cards well. I was going to just leave the account at £0, but I think if I use the card (like for just fuel), and pay it back in full each month, am I right in thinking that my credit score will improve?

Advice would be appreciated! 

Also, on a side note, how long is it before my credit score improves from defaults? I had 5, the newest being summer 2019, the oldest being winter 2018. I know these will be on there for 6 years, but will my score steadily improve? 

I would like a mortgage in the next 3/4years, now I have a good job and good wage. So trying to think ahead!

Thanks guys! 

[Deleted User]

DebtFreeWannabee95 said:

You’ll have to excuse me, as I’m not ‘with it’, when it comes to using credit cards well. I was going to just leave the account at £0, but I think if I use the card (like for just fuel), and pay it back in full each month, am I right in thinking that my credit score will improve?

No.  Your score will drop as you'll be changing your behaviour. 

 But it will build credit history which improves how lenders see you. They're the ones who make lending decisions, until Experian bring out their own range of credit cards and mortgages.

Dellgrad12

Ignore the ‘score’ it’s a number only you and the credit reference agency sees. Lenders have their own scoring systems and they are all different.

Lenders do see your data though - so using that credit card for regular monthly spends and paying it in full each month will absolutely work in your favour to build some positive history.

DebtFreeWannabee95

Oh I see!! I always assumed that the score number was everything. So, if I was to spend it, but pay it off in full, my credit score may drop. But that isn’t a bad thing, as lenders will see im
paying it back on time? 

Thanks guys! 

[Deleted User]

Correct. The score is just for fun, like a horoscope or tarot cards.

Jamesyb123

If you get offered a credit limit increase in time accept that too as that shows you’re a trustworthy borrower just make sure you pay your bill on time and in full every month.

cymruchris

DebtFreeWannabee95 said:

Oh I see!! I always assumed that the score number was everything. So, if I was to spend it, but pay it off in full, my credit score may drop. But that isn’t a bad thing, as lenders will see im
paying it back on time? 

Thanks guys! 

That's the way to do it - set yourself a direct debit to pay off your statement in full every month. Don't be tempted to spend a little and pay it off straight away to get the balance back to zero. Don't worry too much about the score. It'll only depress you when it drops, but the building of a positive credit history is more important than a random number generator. 

DebtFreeWannabee95

Thank you all, that’s very useful!! Much appreciated. I honestly thought the number was everything!