Credit score help

Hi everyone .

I’ve been trying to increase my credit score I’ve not had credit for along time except a mobile contact when I’ decided to check my score back in February is was low 180 with Experian ( it’s bad I know ) so I decided to get get some credit to start rebuilding again .

I got 2 catalogues (limit £120 ) and other one £200 after three months of ordering and paying balance in full they have been Increased to (500) and my credit score increased to 394 . read online that getting a credit card would help build it faster I’ve just got one with an initial limit of £200 .

Should I spend the limit then pay it off in full (I can afford to do that ) each month ? I read somewhere that they also look at credit utilization? Is that where you spend the limit and pay it all back so they know you can afford it ?

I’m worried about closing the catalogs down Incase that also has a negative effect ? Any help Or advise would bee very much appreciated

Comments

  • forgotmyname
    forgotmyname Posts: 32,551 Forumite
    First Anniversary Name Dropper First Post
    Strange i checked your score and it was 3 jaffa cakes.

    Spend the limit and your "score" may go down. Pay your bills on time and your "score" may go down. Mine did.
    Work that one out.

    Do you know that only you and the company making up the random number actually know what the number is?

    Nobody your going to borrow money off will ever see it, or care what it is.
    Censorship Reigns Supreme in Troll City...

  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    First Anniversary Photogenic Name Dropper First Post
    Use the card, clear in full each month and ignore the score.

    Time will do the rest.
  • Ben8282
    Ben8282 Posts: 4,821 Forumite
    Combo Breaker First Post Newshound!
    Don't pay attention to the score. Pay attention to maintaining the best credit files that you can. The most important thing is to always pay things on time. If every account reports a status 0 (green tick) each month then you are fine.
    With regard to the credit card that you have, always pay in full every month. Ideally set up a direct debit to ensure that no payment will ever be late or missed so long as you have sufficient available funds in your current account.
    Unfortunately, utilisation is not what you suggest, where you spend the limit and pay it all back so they know you can afford it Spending a lot and repaying it so they can see that you can afford it works very well for increasing the spending power of an Amex charge card but in this sense utilisation refers to the % of available credit that you are using, the idea being that the greater the % the more reliant on credit you are or the more desperate for credit that you are. A high utilisation % can also indicate high levels of debt. In the case of cards with higher credit limits, individuals who habitually spend larger amounts and pay their cards in full each month are not concerned as they have the credit limit to support it. So with a £200 credit limit. if the balance of the card account is £150 you will have 75% utilisation. With a credit limit of £2000 a similar spend would only be 7.5% utilisation. The optimum utilisation figure is apparently 10%. You should normally keep utilisation down to about 30%
    This is where things begin to be difficult. You have been given what for all practical purposes is a ridiculously low credit limit. As the direct debit will not be taken until the payment due date, by the time the direct debit is credited to your account it will soon be time for the next statement to be generated. Therefore, even at full utilisation, you would be unable to spend more than about £100 per-month.
    So what to do?
    Others may well suggest differently, but in your place I think I would go with a higher spend option, spend say £150-175 wait for the statement, repay immediately after the statement was generated then spend another £150-175 the next month and repeat. Pay attention to your issuers policy regarding direct debits and payments made before the direct debit is taken. If your issuer does not take the direct debit once payment has already been made, then set up a full balance direct debit. If your issuer takes the direct debit regardless of any payment made, then set up a minimum payment direct debit and make an earlier payment for the difference between the statement balance and the minimum payment.
  • Time time time is really the key here, my credit score got destroyed after losing my job, but I managed to recover it over 3 years. Now I have a mortgage!!

    Good luck :-)
  • DCFC79
    DCFC79 Posts: 40,598 Forumite
    Name Dropper First Anniversary First Post
    Time time time is really the key here, my credit [STRIKE]score[/STRIKE]history got destroyed after losing my job, but I managed to recover it over 3 years. Now I have a mortgage!!

    Good luck :-)


    Corrected that for you.
  • Thanks everyone for the replies and advice
  • Interesting points on here about Credit Score v Credit History. What is the point, in that case of a Credit Score? If no-one (lenders) actually uses it, and it can go down despite "good" activity you have to wonder.....
    August 2011 - Total Debts - £47,352.12
    November 2018 - Total Debts - £0:beer:
  • [Deleted User]
    [Deleted User] Posts: 35,242 Forumite
    First Anniversary Photogenic Name Dropper First Post
    There is no point in it at all.

    Unless you are the sort of person who believes in horoscopes, in which case it is great.
  • To keep you coming back.

    And to sell you unnecessary "improvement" programs and subscriptions
This discussion has been closed.
Meet your Ambassadors

Categories

  • All Categories
  • 343.2K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.7K Spending & Discounts
  • 235.3K Work, Benefits & Business
  • 608K Mortgages, Homes & Bills
  • 173.1K Life & Family
  • 247.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards