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credit card max payment

in Credit cards
10 replies 1.2K views
Hi - sorry if this is the wrong board.



I'm trying to boost my credit rating by using my credit card as much as possible and having a direct debit set up to pay off the balance in full. But I notice that there's a time lag of a few weeks between the point where the statement is issued and the point where I pay it off (e.g. now I've nearly maxed the card but the statement is for only about half the credit limit, so only this will be taken). My concern is therefore that it will look like I am carrying a half-loaded credit card, which will probably not be good for credit rating?



What do people think? Is this a real problem or an imaginary one? If it's real, what solutions are there?

Replies

  • zx81zx81 Forumite
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    It's an imaginary problem, just like your credit rating.

    The full pay DD shows lenders you gave no need to borrow and can handle credit responsibly, which all you need.
  • It makes no difference to the CRAs how you pay, only what you pay and the fact you pay on time.

    If you want a higher balance to show, then you could cancel the DD and pay manually just after the statement is generated.

    Obviously you mustn't forget to make the payment.... else you'll end up with late payment fees and possibly a late payment marker.
  • DCFC79DCFC79 Forumite
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    Hi - sorry if this is the wrong board.



    I'm trying to boost my credit rating by using my credit card as much as possible and having a direct debit set up to pay off the balance in full. But I notice that there's a time lag of a few weeks between the point where the statement is issued and the point where I pay it off (e.g. now I've nearly maxed the card but the statement is for only about half the credit limit, so only this will be taken). My concern is therefore that it will look like I am carrying a half-loaded credit card, which will probably not be good for credit rating?



    What do people think? Is this a real problem or an imaginary one? If it's real, what solutions are there?

    Why you trying to boost your rating ?

    Bit pointless when the lenders dont see it.
  • foxy-stoatfoxy-stoat Forumite
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    If your wanting to increase the pointless number you get each month from Noodle just use the card and make the payments on time....or wait for next month where it will spit out another pointless number.
  • I think the OP's reference to improving his/her credit rating is a fair one. I take rating to mean the perception of credit worthiness in the eyes of potential lenders.

    Score is a different matter. These are generated on the fly and made available to people via a paid-for service or free via Barclaycard or whatever. BUT, although different lenders might score differently and take into account different factors (including what you put on their particular application form), it is not always the case the score you see is never seen by anybody else. My business subscribes to Experian to check out new customers. I tested the system on myself and I got exactly the same score as what I got when I obtained my Experian score via the free Barclaycard service.
  • SuperHanSuperHan Forumite
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    DCFC79 wrote: »
    Why you trying to boost your rating ?

    Bit pointless when the lenders dont see it.


    Surely your credit rating is exactly how the lenders see it. In fact, each lender will likely rate your credit and make their decision based on this rating.


    They won't, however, see your credit score.
  • [Deleted User][Deleted User] Forumite
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    SuperHan wrote: »
    Surely your credit rating is exactly how the lenders see it. In fact, each lender will likely rate your credit and make their decision based on this rating.


    They won't, however, see your credit score.

    Because lenders use their own rating/scoring system.

    E.g. Capital One may rate you as high, whereas AMEX will rate you as low

    So the CRA's score/rating is completely irrelevant in the real world
  • PRAISETHESUNPRAISETHESUN Forumite
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    I think the OP's reference to improving his/her credit rating is a fair one. I take rating to mean the perception of credit worthiness in the eyes of potential lenders.

    The rating/score that each CRA gives is basically worthless. It's mostly just a marketing gimmick and doesn't really correlate at all with the likelihood of getting good deals, etc for credit. Each lender will have their own internal criteria - you may score really well for one lender but very poor for another.

    OP - focus on building up your credit HISTORY rather than the score. Making purchases on your CC and then paying it off in full every month (use a DD so you don't forget) is the easiest way to do this. Ideally keep utilisation around 30-50% but this isn't really a deal breaker IMO. The lag between when your CC statement is generated and the payment is taken is normal, and as long as you pay by the due date it will be marked as paid in full and reported to the CRAs as such. Keep doing this and eventually you will be eligible for better deals, cheaper loans, etc :)
  • SncjwSncjw Forumite
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    The reason why you have half after paying it off is because your spending after the statement is generated. If your continuing to have spends near the limit you run the risk of going over the limit in case the funds are not cleared on time due to weekends and bank holidays
  • SnowTigerSnowTiger Forumite
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    My concern is therefore that it will look like I am carrying a half-loaded credit card, which will probably not be good for credit rating?

    What do people think? Is this a real problem or an imaginary one? If it's real, what solutions are there?

    You're imaging there's a problem.

    Lenders know how credit cards work and know how to interpret your credit file.

    Here's a snapshot of a credit card entry from my credit report.

    CRA_Report.png

    March's statement was for £905; report shows statement paid in full.

    April's statement was for £992; report show statement paid in full.

    Etc.

    The snapshot also shows the balance on the account when the details were passed to the CRA. This is typically around the end/beginning of the month.

    Your statement and balance may be a month out of sync. For example, when your statement date is 25th of the month and payment is made 17th of the following month. That's very normal.

    One thing to be wary of is that some card providers only report the amount of the last payment made during a billing cycle. For example, if your statement balance is £500 and you make payments of £200, then £200, then £90 and then £10 they would report your payment as £10.

    I think that's why my statement balance was £240 in January and I appear to have made a payment of £0. Checking back through my records I see I made a payment of £250. An over payment of £10. That appears to have been recorded as £0.

    The golden rules are: stay within your credit limit and pay off your balance in full every month. Don't fret about what behaviour you think lenders want to see.
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