Credit Usage Trap - Help!!

mickjagger123

So I have been using an American Express card for 19+ years - averaging £1,500 per month, occasionally peaking at £3,000 as I  expense back from my job...Always pay card off on time. 

Stupidly, I took the advice from all the credit rating agencies, that I should take out another credit card to build my credit rating. Realised that I would have to start off low on the new card and then build up, but what could possibly go wrong?

Took out the Tesco Credit Card that was recommended as a credit limit building card. They gave me a £250 credit limit. Fine - I knew it was going to take a while.

To my horror, my total credit limit, as far as the credit agencies are concerned is now total £250, despite my excellent record with American Express. I am recommended to only spend under 25% of my credit limit each month otherwise my credit rating will drop. That means that my American Express spending and my Tesco card spending TOGETHER should be around £60 per month. Have spoken to the credit agencies and the cards - no one seems to have a suggestion for this. Tesco has said that they can not raise my limit for at least 6 months, and then maybe not - there is no rough indication of when it will increase, if ever.

Has anyone else had this ridiculous situation - and any solutions??

CliveOfIndia

mickjagger123 said:

 any solutions??

Yep - ignore all the tosh spouted by the CRAs, ignore your score, ignore their assessment of your credit-worthiness, ignore their rubbish about percentage utilisation.  Use your cards regularly, always repay in full every month and you'll be fine.  Utilisation percentage is only an issue if you're carrying a balance from month-to-month - if you always repay in full it's completely irrelevant.

Your credit history is what matters - and all that means is using your cards regularly, always repaying in full, never carrying a balance (and never paying interest!)

As to why your total credit limit is being reported wrongly, I'm not entirely certain.  Although, not all lenders report in to all 3 CRAs, so it may just be that AmEx doesn't report in to the same one where you're seeing you Tesco card reported.

Nearlyold

Simples - just ignore your so called credit rating. The numbers are all made up anyway. I occasionally look at mine and a month or so ago it told me mine had gone down because a) I'd used more of my available credit and b) I was only using a small amount of my avaliable credit.

adamp87

Irrespective of the score

Is your Amex a credit card? Then your total balance on your reports should be the credit limit for both cards not the Tesco card.

My Amex reports across all 3 major CRA’s along with other accounts. 

mickjagger123

adamp87 said:

Irrespective of the score

Is your Amex a credit card? Then your total balance on your reports should be the credit limit for both cards not the Tesco card.

My Amex reports across all 3 major CRA’s along with other accounts. 

I thought mine was a credit card all these years and it seems to be one in every way except that it does not report a credit limit. 

Casskale

mickjagger123 said:

adamp87 said:

Irrespective of the score

Is your Amex a credit card? Then your total balance on your reports should be the credit limit for both cards not the Tesco card.

My Amex reports across all 3 major CRA’s along with other accounts. 

I thought mine was a credit card all these years and it seems to be one in every way except that it does not report a credit limit. 

Amex do charge cards and credit cards, yours will be a charge card.

They don't have credit limits in the same way that credit cards do, which is presumably why no limit is being recorded.