Help on credit cards and credit rating

boygeorge · 11 November 2019 at 11:30PM

I recently have managed to get my debts down to £5k which is now solely on one credit card with a limit of just over 10k. I have another CC which had a limit of £3.5k but recently reduced it to £500 and owe nothing on it. Ideally, I would like not to pay or as little interest on the remaining £5k. I have looked at my options and I have been preapproved on Vanquis and Capital One cards for 0% 6 months balance transfer of up to £1500 on each card. Would it be wise to apply for either one or both of these cards as they would help vastly with the interest. I am concerned about and am not keen on having multiple credit cards and if I did apply for the cards how would it impact on my credit rating which I am trying to build at the same time.

EssexHebridean · 12 November 2019 at 12:46PM

Can you clear that full 3k inside 6 months? If not then check what the likely interest rate on the balance transfer cards would be once the 0% period ends as both of these are going to be sub-prime cards from the look of what is being offered.

Allowing that you are currently trying to pay down debt, why are you concerned about your "credit rating" (by which I think you mean Credit history - the rating is just a meaningless number used by nobody of any relevance) currently? In any event - in the position you are at the moment your best bet is to ensure that you get the debt cleared as fast as reasonably possible while not being tempted down the line of using any further credit other than decent and reasonable 0% BT's.

boygeorge · 12 November 2019 at 6:54PM

EssexHebridean wrote: »

Can you clear that full 3k inside 6 months? If not then check what the likely interest rate on the balance transfer cards would be once the 0% period ends as both of these are going to be sub-prime cards from the look of what is being offered.

Allowing that you are currently trying to pay down debt, why are you concerned about your "credit rating" (by which I think you mean Credit history - the rating is just a meaningless number used by nobody of any relevance) currently? In any event - in the position you are at the moment your best bet is to ensure that you get the debt cleared as fast as reasonably possible while not being tempted down the line of using any further credit other than decent and reasonable 0% BT's.

Thank you for your response. After clearing my debt I intend on sorting my mortgage out. I will need a good credit rating for that was the feedback I got from my advisor. I am not sure I will be able to pay 3k in 6 months but can afford 1.5k. So I think my best option may be to cancel the £500 card and apply for the 0% BT one. On the other hand, using the £500 for daily transactions and paying it off helps with my credit scoring.

[Deleted User] · 12 November 2019 at 7:58PM

boygeorge wrote: »

Thank you for your response. After clearing my debt I intend on sorting my mortgage out. I will need a good credit rating for that was the feedback I got from my advisor. I am not sure I will be able to pay 3k in 6 months but can afford 1.5k. So I think my best option may be to cancel the £500 card and apply for the 0% BT one. On the other hand, using the £500 for daily transactions and paying it off helps with my credit scoring.

I'm rolling my eyes at your mortgage advisor. There's no such thing as a universal credit score or rating. Lenders will be looking at your credit history, affordability and past dealings with them.

https://www.moneysavingexpert.com/loans/credit-rating-credit-score/

EssexHebridean · 13 November 2019 at 12:58PM

I'd also be questioning your "financial advisor" I'm afraid - they should be talking to you about your credit file, or credit history - NOT "credit rating". Good link provided by Lover of Lycra above.

Forget about scores and ratings for the time being - concentrate on clearing your debt - so re-work your budget, see if there is anything else you can squeeze a bit to get the debt gone sooner. Make sure that you have an emergency fund in place to cover anything that comes up unexpectedly and avoid needing to reach for credit. If you're currently using any form of overdraft get that cleared and reduced down to "safety net level" as well - ie an amount designed to cover if a DD comes out a day early for some reason, or you accidentally withdraw cash the day before payday. Make sure that you on the electoral register at your current address.

Help on credit cards and credit rating

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free