Building Credit - keep current accounts open?

the_crunch

I have recently begun trying to repair my credit. My experian credit report had a score of about 500 (very low). I have paid off all my debts and have opened a new current account at Barclays - the only type of card I could get was the hole in the wall cash card..... no switch, no solo, no visa!

I have heard that the best thing to do is to start a fresh with a new bank, so thats what I did with Barclays, but I also have a Natwest account with a £1200 overdraft. Should I pay off and close my Natwest account or keep using my overdraft facility to build my credit, making sure I don't go above my limit? So confused!

skyrider007

keep the natwest account! i would imagine that if you get £1200 o/d you should have a maestro servicecard 100.

the_crunch

Yes i have a servicecard 100 - I assume that the best thing for me to do with this account is to keep it open and stay overdrawn but within its limits so I am still paying for the debt and paying the interest thus making me a more profitable customer, yes? How long would it be before I am likely to qualify for a high interest credit card?

Moggles_2

the_crunch wrote: »

I assume that the best thing for me to do with this account is to keep it open and stay overdrawn but within its limits, so I am still paying for the debt and paying the interest thus making me a more profitable customer, yes? How long would it be before I am likely to qualify for a high interest credit card?

It takes time to build a credit history.

For tips to improve your chances of cc acceptance, have a look at the *Credit Rating* articles on the main site, especially Martin's *Manage and Improve your credit score* article

Meanwhile, I would keep the NatWest a/c with its overdraft facility, but concentrate on reducing your overdraft as much as possible each month. Clearing the debt ASAP will reduce the interest you pay and you'll acquire a better credit rating in the process.

the_crunch

Yes I read Martins article - its very good. Ive sent my form for electoral role and have also applied for that cashplus card.

Surely though, if I am paying more interest to natwest, I am a more profitable customer for a bank to have.....

Jvic28

the_crunch wrote: »

Yes I read Martins article - its very good. Ive sent my form for electoral role and have also applied for that cashplus card.

Surely though, if I am paying more interest to natwest, I am a more profitable customer for a bank to have.....

Hi,

just because you make the bank more money doesn't mean you're credit rating will improve, otherwise all these people being charged fees for going over their limits would have amazing scores as they are making the banks loads of dough.

You're credit report is based on lots of things and one of them is the amount of debt you have outstanding so work at reducing it slowly. If you were within your limit I wouldn't have bothered with the new account. Not sure how anyone else feels about that though just my opinion.

X

Jvic28

the_crunch wrote: »

Yes i have a servicecard 100 - I assume that the best thing for me to do with this account is to keep it open and stay overdrawn but within its limits so I am still paying for the debt and paying the interest thus making me a more profitable customer, yes? How long would it be before I am likely to qualify for a high interest credit card?

I really think given your history that you would be better off staying away from high interest credit cards. If you have a good relationship with a bank and prove yourself, over time you will be able to get a good credit card (if you can trust yourself)

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