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  • FIRST POST
    • T-G-C
    • By T-G-C 13th Feb 18, 10:52 PM
    • 129Posts
    • 57Thanks
    T-G-C
    "The Doppler Effect" with Credit Cards?
    • #1
    • 13th Feb 18, 10:52 PM
    "The Doppler Effect" with Credit Cards? 13th Feb 18 at 10:52 PM
    I've noticed with my recent approach to going from a consistent high utilization of credit (on my 4 cards) to being slap-bang 0% utilization on all three of them (and reduced balance on 4th due to 0% promo) has had a Doppler Effect on my credit rating.

    I was speaking to Nationwide this morning about our relationship, which part of such was a credit check. Not to my surprise, they said it would take a few months of demonstrating low-credit demand before lenders will take the sharp drop into consideration.

    They recommended that I kept my total credit utilization, bearing in mind other determined factors about me, to around 25% or less on a consistent basis, as this shows perspective lenders that I am not reliant on credit / experiencing financial distress or otherwise reckless.

    Admittedly I did have one slip-up with Capital One in January, where I went overlimit, however I did contact them to explain the reason behind it. The agent reimbursed the £12 default sum as it was a first offence & assured me that Capital One UK do not report* overlimit markers to the CRAs.

    * When I say they do not report, it means the marker is not reported, however, if a customer is overlimit on their statement date, Capital One will report the balance and therefore lenders can put 2 + 2 together and realize the person has exceeded their credit limit amount. If you make one mistake and rectify the balance immediately, it saves people from ruining their hard work.

    Overall, I aim to completely streamline and tame my usage of credit cards, as I'd like to get rid of sub-prime by 2020 and move to a mainstream lender with a long-term 0% deal.

    I've seen providers like Sainsbury's Bank offering 36 months 0% to those with a fantastic credit rating - that is wishful thinking at the moment but I aspire to get there.

    Vanquis are quite stuck-up when it comes to limit increases, but to be honest, as I am sure you would all agree, a high credit limit on their monstrous cards are not a good idea and merely act as a worthless temptation to spend more and carry a balance (which I've never done btw.) I obtained Vanquis Origin as my first credit card in 2017 after turning 18, with a credit limit of £250 - they haven't bothered to increase it but I am partially glad. Never paid a penny in interest due to clearing it in full by bank transfer every month.

    Hopefully in 12 - 24 months time I can come back with a sub-prime eliminated status!
    Last edited by T-G-C; 13-02-2018 at 10:56 PM.
Page 1
    • 18cc
    • By 18cc 14th Feb 18, 2:13 PM
    • 385 Posts
    • 232 Thanks
    18cc
    • #2
    • 14th Feb 18, 2:13 PM
    • #2
    • 14th Feb 18, 2:13 PM
    What is a doppler effect on credit rating?
    • Gary_Dexter
    • By Gary_Dexter 14th Feb 18, 2:16 PM
    • 931 Posts
    • 515 Thanks
    Gary_Dexter
    • #3
    • 14th Feb 18, 2:16 PM
    • #3
    • 14th Feb 18, 2:16 PM
    What is a doppler effect on credit rating?
    Originally posted by 18cc
    What credit rating?

    There's no such thing
    • ricky_v
    • By ricky_v 14th Feb 18, 9:27 PM
    • 296 Posts
    • 163 Thanks
    ricky_v
    • #4
    • 14th Feb 18, 9:27 PM
    • #4
    • 14th Feb 18, 9:27 PM
    What is a doppler effect on credit rating?
    Originally posted by 18cc
    It's an effect where a credit score increases as the credit file travels towards you and decreases when the file travels away from you.
    • T-G-C
    • By T-G-C 14th Feb 18, 10:10 PM
    • 129 Posts
    • 57 Thanks
    T-G-C
    • #5
    • 14th Feb 18, 10:10 PM
    • #5
    • 14th Feb 18, 10:10 PM
    It's an effect where a credit score increases as the credit file travels towards you and decreases when the file travels away from you.
    Originally posted by ricky_v
    Apply the concept in metaphoric terms.

    The closer to 25% < on anything related to your credit file, the more attractive your credit file.

    If you reverse the operation and exceed 25% > you create the opposite effect and degrade your file.

    This doesn’t apply to other lending criteria used such as income etc.
    All advice provided is intended for guidance purposes only. For specialized debt advice, please contact either National Debtline or StepChange.
    • ricky_v
    • By ricky_v 14th Feb 18, 10:37 PM
    • 296 Posts
    • 163 Thanks
    ricky_v
    • #6
    • 14th Feb 18, 10:37 PM
    • #6
    • 14th Feb 18, 10:37 PM
    Acceptance and credit limits seem to be random.

    Virgin Money and Sainsburys appears to hate me while TSB have given me a £12k limit at 0%. Others have probably got a Virgin CC with a £12k limit and been rejected for a TSB card. Some of my cards have no outstanding balance, some have >90% of the limit and Santander recently accepted me with a £3k limit for a 0% BT card, Saisburys will probably still stick 2 fingers up to me. Only go for cards which give/save you money. I have sub-prime (including Vanquis!) and 0% cards, most make me money (cashback/stoozing), the rest have saved me money with foreign use.

    It's very easy to overthink this subject, I have about £14k on 0% (over half my gross annual salary) and I don't bother with thinking about ultilisation, credit scores and doppler effects. IMO just stick with the golden rules;

    -Pay on time.
    -Don't go over the limit and stick to the T+C's.
    -Don't pay any interest (except on foreign cash withdrawals using cards such as the Clarity)

    And you can't go far wrong
    • chattychappy
    • By chattychappy 14th Feb 18, 10:47 PM
    • 6,725 Posts
    • 3,628 Thanks
    chattychappy
    • #7
    • 14th Feb 18, 10:47 PM
    • #7
    • 14th Feb 18, 10:47 PM
    I was speaking to Nationwide this morning about our relationship, which part of such was a credit check. Not to my surprise, they said it would take a few months of demonstrating low-credit demand before lenders will take the sharp drop into consideration.

    They recommended that I kept my total credit utilization, bearing in mind other determined factors about me, to around 25% or less on a consistent basis, as this shows perspective lenders that I am not reliant on credit / experiencing financial distress or otherwise reckless.
    Originally posted by T-G-C

    All this assumes that the person you spoke to knew what they were talking about. Now I'm not saying they don't (what they said is credible) - but there is certainly a proud history of call centre staff talking rubbish. As for branch staff, not sure how much they know about CCs, but I've certainly heard some daft stuff spoken in branches, including by my own sister when she worked for Natonwide!
    • shortcrust
    • By shortcrust 14th Feb 18, 11:12 PM
    • 1,749 Posts
    • 2,509 Thanks
    shortcrust
    • #8
    • 14th Feb 18, 11:12 PM
    • #8
    • 14th Feb 18, 11:12 PM
    Is it where the chorus of "there's no such thing as a credit rating!" gets lower in pitch as a thread gets longer?
    • SnowTiger
    • By SnowTiger 14th Feb 18, 11:32 PM
    • 3,257 Posts
    • 2,220 Thanks
    SnowTiger
    • #9
    • 14th Feb 18, 11:32 PM
    • #9
    • 14th Feb 18, 11:32 PM
    Don't over-think credit cards.

    Put all the spending you can on your credit cards and pay statement balances in full before the payment date.

    The differences between sub-prime and mainstream cards are minimal these days.

    Sure, you get a lower APR on, so-called, mainstream cards; but the aim of the game is not to pay any interest, so APR shouldn't matter.

    The perks offered by mainstream cards now are pretty dismal. Aqua, generally considered a sub-prime card, offers a better incentive than most mainstream cards.
    • T-G-C
    • By T-G-C 15th Feb 18, 5:30 PM
    • 129 Posts
    • 57 Thanks
    T-G-C
    Don't over-think credit cards.

    Put all the spending you can on your credit cards and pay statement balances in full before the payment date.

    The differences between sub-prime and mainstream cards are minimal these days.

    Sure, you get a lower APR on, so-called, mainstream cards; but the aim of the game is not to pay any interest, so APR shouldn't matter.

    The perks offered by mainstream cards now are pretty dismal. Aqua, generally considered a sub-prime card, offers a better incentive than most mainstream cards.
    Originally posted by SnowTiger
    I agree. The stigma of the ‘less endowed’ credit card holders are fading. In my opinion, Capital One is better than Santander in some ways more than others for example.

    I’ve never paid Vanquis’ charge of £17 for a balance of £250 - I max out each month then clear it.

    Capital One are generous with 0% with me in addition to Aqua, so having a balance isn’t an issue until expiration.
    All advice provided is intended for guidance purposes only. For specialized debt advice, please contact either National Debtline or StepChange.
    • Chrysalis
    • By Chrysalis 15th Feb 18, 5:38 PM
    • 2,214 Posts
    • 1,056 Thanks
    Chrysalis
    For long term balances, the premium cards are obviously best.

    But yes for short term, clearing balance every month spending, there is no difference, the only perk in that scenario is cashback bonuses.

    I for ages used my capital one card as my purchases card and I still use it for about 1/4 of my spending. The tesco is used for the rest because of the clubcard points.

    My 0% BT cards are not used at all other than the initial BT.
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