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    • SazLloyd
    • By SazLloyd 15th Mar 17, 11:32 AM
    • 2Posts
    • 0Thanks
    Best option to reduce credit score impact
    • #1
    • 15th Mar 17, 11:32 AM
    Best option to reduce credit score impact 15th Mar 17 at 11:32 AM

    I need some advice. Iím unsure of the best course of action for myself.

    Due to unforeseen reasons I had to take use of a Barclaycardís Money Transfer offer Ė transferring credit into cash at the end of last month. The cash offer is at 0% interest for 12 months, but any additional card usage for this time is charged at a premium interest per day until the next bill, therefore it basically means that my Barclays card is out of action until I pay the debt off. Paying it off isnít a huge worry to me as I will be able to pay £200 per month from April onwards (March I paid the slightly over the minimum monthly amount). But I have no savings currently, and this option would mean I wouldnít start saving until the debt war repaid.

    But previous to this transfer, I only ever used my card for petrol payments, and paid it off in full when my travel expenses were paid back to me in my following monthís pay packet. I would like to keep doing this, and am considering getting another credit card to do so, but despite reading up on the issue for the past 2 hours Iím still unclear if this is a sensible thing to do Ė as I donít want this situation to worsen my credit score.

    I currently have a credit score of about average 350 Ė I have some issues that constantly need to be resolved on it, mainly due to the fact that I work in a project lead industry and I basically have moved every 6 months for the past 18 months. And Iím fixated on trying to better my credit score in the next 2 years (current length of contract for current project).

    Basically which will be the least harmful path for me credit score wise:
    a) Apply for a new credit card. Use it for travel expenses and pay it back in full every month, and pay the balance transfer off at the rate mentioned above. If so which kind of credit card is best to build credit score?
    b) Apply for a new credit card as above. Pay £100 towards my balance transfer debt and put £100 in savings.
    c) Pay £100 towards my balance transfer debt and put £100 in savings Ė Do not apply for a new credit card.
    b) Concentrate fully on paying off the balance transfer debt. Do not worry about savings or new credit card at the moment.

    Sorry, I hope this makes some sense. Have found wording my question difficult.
Page 1
    • zx81
    • By zx81 15th Mar 17, 12:39 PM
    • 16,354 Posts
    • 17,377 Thanks
    • #2
    • 15th Mar 17, 12:39 PM
    • #2
    • 15th Mar 17, 12:39 PM
    And Iím fixated on trying to better my credit score in the next 2 years .
    Originally posted by SazLloyd
    That's where you're going wrong. Ignore it completely - it's not a useful guide.

    Get a new or empty card, and use that for your spending. Clear it in full each month to avoid interest.
    • Ebe Scrooge
    • By Ebe Scrooge 15th Mar 17, 1:47 PM
    • 4,127 Posts
    • 3,569 Thanks
    Ebe Scrooge
    • #3
    • 15th Mar 17, 1:47 PM
    • #3
    • 15th Mar 17, 1:47 PM
    As above, your score is total hogwash - nobody sees it except you and the CRA.

    To build up a solid credit history - which is what you're wanting to do - then do this :

    1. Get a new credit card for everyday spending. Doesn't matter which one. A mainstream one if you can get accepted, if not then go for a sub-prime.
    2. Put petrol, groceries etc. on this card.
    3. Pay it off, in full, on time, every month when the statement arrives ( not before the statement arrives ). A Direct Debit is the simplest and safest way to do this. This will begin to build up a history of responsible borrowing and repayment, which is what a new lender will want to see. Ignore the APR - you'll be paying in full every month, so you'll pay no interest.

    ... Meanwhile ...

    You need to pay at least the minimum each month to your 0% card. Miss a payment and the promotional rate will be instantly revoked. You have 2 options. Either make the minimum payment each month to the card, and also put some money into a savings account ( useful if you happen to earn interest on your savings ). Or else, divide the balance by 12 and pay that amount to the card each month. Either way, you must make sure that, come the end of the 0% period, you have either paid off, or have the means to pay off, the balance. You *may* be able to shift it to another 0% deal, but don't bank on it ( and even if you do, you'll have another Balance Transfer fee to pay ). Whatever, if you're stuck still owing money on the card when the 0% deal runs out, you'll suddenly find yourself paying their standard APR, which is likely to be fairly high.
    Last edited by Ebe Scrooge; 15-03-2017 at 7:16 PM.
    I may not know much about art, but I know what I like.
    • SazLloyd
    • By SazLloyd 15th Mar 17, 3:14 PM
    • 2 Posts
    • 0 Thanks
    • #4
    • 15th Mar 17, 3:14 PM
    • #4
    • 15th Mar 17, 3:14 PM
    Thank you. I suspected that I was on the right path idea with getting the other card - but I got confused trying to research the topic! There's so much conflicting evidence. I appreciate the advise.
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