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  • FIRST POST
    • Guerillatoker
    • By Guerillatoker 31st Jul 18, 4:21 PM
    • 406Posts
    • 427Thanks
    Guerillatoker
    Am I using my credit card wrong?
    • #1
    • 31st Jul 18, 4:21 PM
    Am I using my credit card wrong? 31st Jul 18 at 4:21 PM
    I've never had a good credit rating, making many unwise decision in my first few years of adulthood. I have a default as part of an employment dispute (thats a story for another day) but thats the only negative on there now. If I'm being frank, I have no immediate need for credit but I'm sure I will want a mortgage eventually. The primary motivation for this post is that I am considering applying for a credit card with some actual benefits and would like to review my habits and whether I should bother.

    In 2014, I was lucky enough to be offered a Aqua basic credit card. This was surprising because I even get turned down for run-of-the-mill phone contracts or store credit (not that I am a frequent applier, maybe once a year at most).

    The rate increased from 250 to 2850 over the lifetime of the card, as I have always made full balance payments on time, every month. However (and I know that the "Credit Score" from the reference agencies are meaningless to potential lenders) I have never seen any particular positive change to my credit report. For all that I've read, it seems credit cards are the only viable way to improve credit for us mere peasents.

    So, I'm wondering if I am not seeing the credit rating benefit of using a card due to how I use it:

    When I haven't got cash I use the card for all purchases - online, in shops etc - and a couple of monthly subscriptions. I don't use cash much at all so this is frequent use. I use it for all big purchases so some months I may have a statement of 200, and some months it may be much higher (it was close to the limit this month for the first time in a while) but the statement is always, without fail, paid off in full. I do not use it to withdraw cash or gamble (I did use it once, way back in 2014, and learnt my lesson - thats the only time I have ever paid interest on it).

    Is this the wrong away to use my credit card?
Page 1
    • sparkey1
    • By sparkey1 31st Jul 18, 4:26 PM
    • 439 Posts
    • 199 Thanks
    sparkey1
    • #2
    • 31st Jul 18, 4:26 PM
    • #2
    • 31st Jul 18, 4:26 PM
    No. Have you looked at the other areas in your life.

    For example

    1 Are you on the electoral roll?

    2 I assume you rent. Have you looked at creditladder.co.uk website

    3 Do you pay utility bills. Some companies report to CRAs how your account is managed.

    4 Do you have an overdraft facility on your bank account.
    • Willing2Learn
    • By Willing2Learn 31st Jul 18, 4:29 PM
    • 2,593 Posts
    • 2,133 Thanks
    Willing2Learn
    • #3
    • 31st Jul 18, 4:29 PM
    • #3
    • 31st Jul 18, 4:29 PM
    Hi Guerillatoker,

    You are using card very sensibly. That is the way it should be done. Spend freely, stay below the limit, pay balance in full after receiving a statement. That is what creditors like to see. And also having the stability of the same credit account over a number of years.


    When was the default? It drops off your credit report six years after the date of default.


    Just keep doing what you are doing and everything will be fine in your credit report.


    Yours sincerely,
    a peasant!!
    I work within the voluntary sector, supporting vulnerable people to rebuild their lives.

    I love my job

    • Gary_Dexter
    • By Gary_Dexter 31st Jul 18, 4:30 PM
    • 3,808 Posts
    • 2,338 Thanks
    Gary_Dexter
    • #4
    • 31st Jul 18, 4:30 PM
    • #4
    • 31st Jul 18, 4:30 PM
    You don't have a score or rating so ignore it.

    Using the card and paying it off in full after each statement is the correct thing to do - don't worry that the fictional score/rating isn't changing.

    Do you have any other credit accounts?
    • Guerillatoker
    • By Guerillatoker 31st Jul 18, 4:48 PM
    • 406 Posts
    • 427 Thanks
    Guerillatoker
    • #5
    • 31st Jul 18, 4:48 PM
    • #5
    • 31st Jul 18, 4:48 PM
    No. Have you looked at the other areas in your life.

    For example

    1 Are you on the electoral roll?

    2 I assume you rent. Have you looked at creditladder.co.uk website

    3 Do you pay utility bills. Some companies report to CRAs how your account is managed.

    4 Do you have an overdraft facility on your bank account.
    Originally posted by sparkey1
    Thanks for your response.

    1. Yes

    2. Checking it out now

    3. Electricity & gas for about 2-3 years at this address. I very recently paid off a water bill from an old property that resurfaced as a "late payment" after I had long forgotten about it.

    4. 200 on my current account that I haven't used for a good year or so - would cancelling that do any good?


    When was the default? It drops off your credit report six years after the date of default.


    Just keep doing what you are doing and everything will be fine in your credit report.


    Yours sincerely,
    a peasant!!
    Originally posted by Willing2Learn
    Reported on my credit file on Mar 2016. Its an old student overdraft that was thrown over the limit after the bank - who was also my employer - tried to screw me out of about 500 holidays pay when they clawed back some of my final salary. I did my best to sort the situation but was sent in circles between HR & my manager, so I just decided to let it play out. Probably not wise in the long run but I didn't have the security at the time to take that loss on the chin.

    & don't worry, we'll live like royalty eventually!

    Do you have any other credit accounts?
    Originally posted by Gary_Dexter
    Just the overdraft on my current account and the student overdraft in default mentioned above.

    I am sole Director of my own limited company (which has no debt) so don't know if that has any bearing on things.
    Last edited by Guerillatoker; 31-07-2018 at 5:22 PM.
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