Paying off multiple 0% credit cards and improving credit rating

corinnefoy

Hello
my 0% credit cards of x4 will be moving to charges soon. I need to do a 0% balance transfer to another card but need to increase my credit rating. What is the best option to do this. I can pay half the debt beforehand so is it better to pay a couple off in full or to pay 50% off on all of them instead to improve my credit rating? 

MorningcoffeeIV

Disregard your credit rating. No one sees or uses it.

Lenders will view you the same either way as you will have the same debt. Pay off the cards that will go to the highest rate.

If rates are the same, pay off those most likely to give you a decent promotional offer.

CliveOfIndia

As per the previous reply, the credit score and/or "rating" that you see on your CRA reports is meaningless.  Any lender will assess you individually based upon a number of factors, 2 main ones being your income and your existing level of debt.

If you have a decent credit history (that is, an established pattern of responsible borrowing and always repaying on time), this will be looked upon favourably by a lender.  But it takes time to build up a good history, it's not something that can be done overnight.

In the immediate term yes, if you can reduce the amount of debt you currently owe, this may go some way to improving your chances of getting accepted for another BT card.  But there's still no guarantee, which is why the advice is always to never bank on being able to do a BT when a promotional rate expires.

And I agree again with MorningCoffee - if you're unable to repay the cards in full, then focus on the one that will start charging the highest APR.  A potential future lender won't care which cards you hold the debt with, it's your overall level of debt that they're interested in.

prettyandfluffy

corinnefoy said:

Hello
my 0% credit cards of x4 will be moving to charges soon. I need to do a 0% balance transfer to another card but need to increase my credit rating. What is the best option to do this. I can pay half the debt beforehand so is it better to pay a couple off in full or to pay 50% off on all of them instead to improve my credit rating? 

When you say "moving to charges soon", how soon? I have had several 0% cards and very close to the end of each 0% period I get offered a new 0% period although the duration and transfer charges vary.  It may be worth putting plans in place but do nothing until a week or so before the current offer expires, as you might be offered a new deal by one of the cards you already have.

Nasqueron

Do any of them have offers? If you have a couple, you can juggle around the balances to shift them to new 0%

Funnily enough Barclays just started offering me BT again after maybe a year without any as I was paying the balance down so I've done that to clear off 3 cards into 1 with a 2 year 0% deal allowing me to keep the planned repayment money in interest accounts for longer which I think will just about make a profit for me

Superhoopza

Nasqueron said:

Do any of them have offers? If you have a couple, you can juggle around the balances to shift them to new 0%

Funnily enough Barclays just started offering me BT again after maybe a year without any as I was paying the balance down so I've done that to clear off 3 cards into 1 with a 2 year 0% deal allowing me to keep the planned repayment money in interest accounts for longer which I think will just about make a profit for me

Do you mind sharing details of the amounts and frequency you were paying the balance down? I know there are lots more circumstances in play, but I'm hopeful of them doing the same to me. I've reduced my balance with them to under 60%.

Nasqueron

Superhoopza said:

Nasqueron said:

Do any of them have offers? If you have a couple, you can juggle around the balances to shift them to new 0%

Funnily enough Barclays just started offering me BT again after maybe a year without any as I was paying the balance down so I've done that to clear off 3 cards into 1 with a 2 year 0% deal allowing me to keep the planned repayment money in interest accounts for longer which I think will just about make a profit for me

Do you mind sharing details of the amounts and frequency you were paying the balance down? I know there are lots more circumstances in play, but I'm hopeful of them doing the same to me. I've reduced my balance with them to under 60%.

I simply take the balance I transfer divide it by the number of months that the offer runs for then pay that amount every month so that the final payment (which is usually +/- 5% of the monthly payment) clears it before the balance runs out

I don't care about % utilisation (though I do have it tracked on a spreadsheet for my own amusement), it's normal for a new BT card to have 90-95% when you do a transfer. With the BC offer now I have 1 fully paid off, 2 that will be paid off either this month (too late to stop the DD) or next month (as the amount paid is > than the minimum payment) assuming they don't try and take the DD anyway. That way I have 3 cards now instead of 6 with a fixed end date and the money can sit in my savers earning interest.

Naturally it will take longer to pay off with less a month going on the debt (though only around 4 months as it happens) but I would rather have pay sat in the Kroo account / NatWest regular savers that pay interest monthly and leave money in my FD regular saver.