Best way to use credit cards and overdrafts to build up credit score AND KEEP current overdraft etc

money08

Hi guys, I have just acquired a new CC (£3100 limit)and an overdraft facility (£500) from Santander. Bless em.
I have had CCs and overdrafts before and dipped in and out of the balances to an extent but never O/D. I think it was Halifax a few years back suddenly decided to reduce my O/D from £1500 to around £327 (how on earth did they get that figures!) Likewise similar stories with CC limits. So, how does one work the accounts to keep these limits, or even increase them? I dont have any debt and always pay bills on time (now DD) I presume its because Im never maxing out and dont pay any fees for being O/D...they cant exist unless we pay fees right? Am I right or is there something I am missing? thanks.

phillw

Even if you maxed out your O/D, they can demand you repay it at any time.

They reduce your credit because they want to, there doesn't seem to be any benefit to lenders if their system could easily be gamed.

born_again

Don't worry about your credit score (not seen by lenders). Only means anything to CRA. 

So long as your credit history is good, that is the main thing lenders look at. As well as you available debt to income ratio.

Jami74

money08 said:

 So, how does one work the accounts to keep these limits, or even increase them? 

I'd probably try not to use the overdraft at all. They are usually expensive, so dipping into it looks like you are not managing your money very well. 

Credit cards - use it regularly on stuff you'd buy anyway (not cash withdrawals) and pay it off in full every month by direct debit.

When I've been offered credit increases on cards it hasn't been because I've neared the limit or had a big spend, they usually just came after I'd been using the card regularly. I noticed the cards that I do a small token spend on each month were less likely to offer me an increase than cards that I used for my main spending. I think the algorithms are more complicated than simply 'spend x amount'. I tend to reject any offers of increases because my limits are all higher than I could afford to spend in a month anyway.