Building my credit profile

Hi all,

I’m new here and just after some advice on how to improve my credit score and get my finances in better shape. I’ve done a fair bit of reading on here but wondered if anyone has any tips for my specific situation.

I am a 31 year old married man. I have a son of 2 months old and I’d like to get myself in a position where I could buy a house in the next few years. Living in the South East doesn’t make this easy, as 10% of the house I would ideally like to buy would be £25-30k. But first things first.

I’ve been very poor with my money in the past. I’ve had loads of loans over the years and even got into a cycle of using payday lenders at one point. Gladly, I’m past this and I normally have money left at the end of the month.

I have a good job (earning nearly £50k pa) and we comfortably pay our bills and have a decent quality of life. However, I still have some lingering debts which I’d like to clear as quickly as possible and I’d like to build my credit score and save some money for the above reasons.

I have a loan I’m still paying off with my bank. I have about £7k still to pay on it and that runs until 2018.

I also have two credit cards. One has a balance of £1100 which I’m paying off as much as I can every month to get cleared as quickly possible (I estimate I’ll have cleared this in the next few months) and the other is zero balance (I’ve just cleared this one).

Should I keep the zero balance card? I don’t need it and I don’t intend to ever use it again. Is it better for my credit profile to keep a non-used card or to cancel it? I suppose the same goes for the other card once I’ve paid it off.

They are both from Capital One so the interest rates are crap but I’d like to know if it’s beneficial for me to keep one or both of them or to cancel them. I am disciplined enough now that I could use one for some expenditure but always pay it off in full every month, if that’s the best way to go.

What I’d also like to know is what is the best way to build or improve my credit score? I’m registered on the electoral roll and, despite a high level of historic debt and the use of payday lenders, I’ve never missed a payment in my life.

Any help/advice will be gratefully received.