Low credit score - shall I get a credit card whilst i am in my overdraft and paying off debt?

christmascookie24

Hi all,

my credit score is in the 'poor' zone at the moment, and I am aiming to pay off my debts. I am currently in my overdraft and should be out of this by the end of the month, but was wondering if it is worth getting a credit card to use to build up my credit score, whilst I am still paying my debts off and whilst I am still paying off my student overdraft from another bank? 

Thanks

eskbanker

'Credit scores' are just numbers invented by the ratings agencies, which aren't seen by prospective lenders, so there's no point in being unduly influenced by them.

As to whether it's worth getting a credit card, that really depends on whether that would just be putting temptation in your way, but if you were confident that it wouldn't lead you further into debt, it wouldn't do any harm to get one and use it for things you would have bought anyway, such as groceries, while paying the balance off in full every month without fail.

christmascookie24

eskbanker said:

'Credit scores' are just numbers invented by the ratings agencies, which aren't seen by prospective lenders, so there's no point in being unduly influenced by them.

As to whether it's worth getting a credit card, that really depends on whether that would just be putting temptation in your way, but if you were confident that it wouldn't lead you further into debt, it wouldn't do any harm to get one and use it for things you would have bought anyway, such as groceries, while paying the balance off in full every month without fail.

thanks so much, my aim is to use it for fuel only to build my score up. Would it be a negative if I was paying it back out of my arranged overdraft? Only asking as not sure whether to get one now or when thats paid off. 

thanks

eskbanker

christmascookie24 said:

eskbanker said:

'Credit scores' are just numbers invented by the ratings agencies, which aren't seen by prospective lenders, so there's no point in being unduly influenced by them.

As to whether it's worth getting a credit card, that really depends on whether that would just be putting temptation in your way, but if you were confident that it wouldn't lead you further into debt, it wouldn't do any harm to get one and use it for things you would have bought anyway, such as groceries, while paying the balance off in full every month without fail.

thanks so much, my aim is to use it for fuel only to build my score up. Would it be a negative if I was paying it back out of my arranged overdraft? Only asking as not sure whether to get one now or when thats paid off. 

thanks

Overdrafts are very expensive ways of borrowing and being in them looks very unappealing to lenders, as well as risky to yourself (as they're repayable on demand and the facilities can be withdrawn without notice), so don't use overdraft money to pay off other debts, and concentrate on getting back into the black (and staying there) in your current account first.