Improve Credit Report & Balance Transfer 24 September 2021 at 4:48PM in Credit file & ratings 2 replies 71 views

Natalie1719

Hi I'm trying to find some advice,
I'm in the process of paying alot of old debts off and trying to better my credit report. It was so poor I was unable to get any credit at all however this year I was able to take a credit card with a £500 limit on. My credit started improving slightly and I was then able to open a "3 step" account with a store. 

I've just this week been approved for a 0% balance transfer card and my idea is to pay the old credit card off in full with it and then pay the balance transfer off within the time limit. 

My question is, (this may be a silly question I'm new to all this) once the old card is paid off, do I close it or keep it open and unused? Do either choices impact my credit report/score at all? 

I won't be using it again I shouldn't think but I wasn't sure if it would look better that I have unused credit available to me rather than a smaller amount of credit that's mostly used up? 

Thank you 

Ebe_Scrooge

Ignore your score, it's neither used nor even seen by any lender.

If you're able to transfer the entire balance of an interest-bearing card to a 0% card, then go for it - it'll obviously save you interest.  Just make absolutely sure you can clear the balance before the promotional rate expires - and don't assume you'll be able to switch any remaining balance to another card.

Unless the combined limits of the 2 cards are large in relation to your income, then it's best to keep both cards open.  Long-standing lines of credit are generally a good thing, as far as your credit history is concerned.

If possible, aim to use both cards every few months if possible - if left unused for long periods, you may find them being closed.  Absolutely DO NOT spend on them just for the sake of it.  But just paying for a tankful of petrol, or the weekly food shop, or anything that you would have to buy anyway, is a good move - as long as you religiously, and without fail, pay the balance in full every month when the statement arrives.  Doing this will gradually start to build up a favourable credit history.

Natalie1719

Brilliant thank you, that's exactly what I wanted to know. 
Thanks for your help!