Topic: How to improve a bad credit score

[RJ320]

If I spend £900 on a credit card, do I have to pay it off all in one go the following month? Or is that what minimum payments are for? Don't want them to suddenly give me massive repayments to make, especially since my new job starts in two weeks and won't get paid for another three weeks.

[CraigDS]

No you can pay the min, or somewhere between the min and the full amount if that's what you want to do.

If you aren't in an introductory 0% period though you'll be charged interest on anything you don't pay off.

[killer-heels]

If I spend £900 on a credit card, do I have to pay it off all in one go the following month? Or is that what minimum payments are for? Don't want them to suddenly give me massive repayments to make, especially since my new job starts in two weeks and won't get paid for another three weeks.

Minimum repayments come with interest a lot of the time so be careful. If you have a big purchase to make and want to spread the cost then get a 0% purchase credit card.

[RJ320]

The card I've got now is 0% purchases for 20 months or something so should be fine on that. Just wish I knew what the minimum payments were, seems to be different every month. For example, right now my account balance is on £152 but the minimum payment is £89. Don't want to spend £900 on it tomorrow only for the minimum payment to be something like £500.

[CraigDS]

That seems ridiculously high for a min payment.

You not able to log in and see what it is in % terms? Or is it on a printed statement if have one?

[SP]

The card I've got now is 0% purchases for 20 months or something so should be fine on that. Just wish I knew what the minimum payments were, seems to be different every month. For example, right now my account balance is on £152 but the minimum payment is £89. Don't want to spend £900 on it tomorrow only for the minimum payment to be something like £500.

https://moneyfacts.co.uk/guides/credit-cards/what-is-a-minimum-payment-on-a-credit-card240211/

[killer-heels]

One question I have, if you have a credit card that you have been using but you dont use and the balance is at zero for a while, does that negatively affect your score?

[SP]

One question I have, if you have a credit card that you have been using but you dont use and the balance is at zero for a while, does that negatively affect your score?

It should not, unless you have ridiculously large number of cards. Remember that the credit score is a marketing fiction. It is a guess at quantifying various lenders lending criteria. To get access to the best credit you need to build a track record of reliably using credit.

[jason67]

How about some tips to stay in the black?

If you don't have the money in your pocket or in the bank don't buy it.

Have at least 5 grand in the bank that you never touch.

Never have a credit card, a bank card will do just the same.

Never have an overdraft on your bank card.

Never get a mortgage that stretches you, always have enough in the bank to last you 6 months of payment.

Don't buy a BMW, AUDI or MERCEDES if you can't afford it outright, look at other options.

Never buy a car unless you can pay for it cash, and then have at least 2 grand to get insured, and the rest.

Learn how to cook, you actually might enjoy it.

Whilst I understand that you love that shirt that ronaldo wears, you're not on 500,000 euros a week.

Stop listening to your friends about what to buy, they're in as much debt as you are. 

Don't have a store card, there's a reason they want you to have them.

Tell your kids who are over 14 years old to get a Saturday job.

And finally, look in the mirror and really ask yourself if all the things you have around you make you happy.

Any other ones I've missed? 

[killer-heels]

It should not, unless you have ridiculously large number of cards. Remember that the credit score is a marketing fiction. It is a guess at quantifying various lenders lending criteria. To get access to the best credit you need to build a track record of reliably using credit.

Yes I have that but was looking to close a card because I was getting an Amex one but didnt know whether its best to close it or just leave it.

[CraigDS]

I'm sure I've read that a lot of unused credit is not a good thing so if you're getting another anyway you're probably best closing it.

Or if wanting to keep it open for a rainy day then at least use some of it each money and have it set to be paid off in full.

[nuts100]

Yes I have that but was looking to close a card because I was getting an Amex one but didnt know whether its best to close it or just leave it.

So some companies look at how much you could conceivably go into debt.
I have 3 cards, one I use for work, but it's my own, a family credit card and my own. I pay these off every month and here in the US you get points etc. I buy everything on them and use points for other stuff.

However, between them I could go into $70k within an hr, so they do look at how much the limit is on each card and use it at a ratio etc. so yeah having too many, even with no debt on any could be an issue.

Or I could be full of shit and given you bad advice 

[Manila Vanilla]

How about some tips to stay in the black?

If you don't have the money in your pocket or in the bank don't buy it.

Have at least 5 grand in the bank that you never touch.

Never have a credit card, a bank card will do just the same.

Never have an overdraft on your bank card.

Never get a mortgage that stretches you, always have enough in the bank to last you 6 months of payment.

Don't buy a BMW, AUDI or MERCEDES if you can't afford it outright, look at other options.

Never buy a car unless you can pay for it cash, and then have at least 2 grand to get insured, and the rest.

Learn how to cook, you actually might enjoy it.

Whilst I understand that you love that shirt that ronaldo wears, you're not on 500,000 euros a week.

Stop listening to your friends about what to buy, they're in as much debt as you are. 

Don't have a store card, there's a reason they want you to have them.

Tell your kids who are over 14 years old to get a Saturday job.

And finally, look in the mirror and really ask yourself if all the things you have around you make you happy.

Any other ones I've missed? 

By far the best advice on this thread.

In my grandparents’ day it was considered shameful to ask for credit. Shops put up posters saying “Please Do Not Ask For Credit As Refusal May Offend”. Now, to be considered “creditworthy” is considered a virtue.

Advertisers tell us we would be happy if we had their product now. Barclaycard shows a woman jumping happily up and down on a bed because they will let her pay money back at an exorbitant rate “even though my credit history wasn’t the best”. So many euphemisms to say she had defaulted.

If people won’t lend you money it’s usually for your own good. It doesn’t mean they think you can easily afford it. They just want to know they can get their money back, even if they have to turf you out of your house.

“Sub-prime” borrowers took money because banks would lend it, so it must be safe. Other people saw their neighbours buying property and followed suit. Demand for property pushed prices up and everyone thought they were making profits. Other banks joined in the lending. After all, the commissions were great. Banks borrowed money from each other so they could lend even more. Then people started defaulting, demand ceased and values crashed.

The only money I ever borrowed in my life was my mortgage. I didn’t take the maximum allowed and made sure I had safety cushions for when things went wrong. If I didn’t have the money now, I waited until I did.

There may be times when it’s worth borrowing, but only if you will generate a higher return. That’s why companies borrow money to create profit. It may be worth borrowing for a car if it’s essential for your job (and income). Try to never get into a hand-to-mouth existence, by stashing a bit away when you have it and by not entering unsustainable life styles.

Otherwise, credit is just a way of paying more for something, while walking a high wire without a safety net.

[Elmo!]

Never have a credit card, a bank card will do just the same.

Never get a mortgage that stretches you, always have enough in the bank to last you 6 months of payment.

Generally good advice but if you want to get the best possible mortgage (or possibly be able to get a mortgage at all), you need to have a credit history, and (responsible use of) credit cards will help with that.

[Rysoph76]

About 3 years ago, my experian credit score was under 250 but it is now almost 800 (which isn't great but a big improvement obviously!). Although it is £14.99 per month for the full report it is worth paying once (you can dip in and out of full membership) so you can see the full thing and who you are associated with financially and some of the little things that count against you. For instance, with mine, I have been with T-Mobile for over 10 years but when they moved everything across to EE, even though I stayed with them on the same contract, somehow they had swapped the bill and there was about £30 outstanding which I had never been told about but which was sitting on my credit file as unpaid. Sometimes just those stupid little things that cause you grief but which are easy to sort when you can see them.

[flemingcool]

Although it is £14.99 per month for the full report it is worth paying once

You can view your full report for free at Noddle and via Money Saving Experts Credit Club website.

Well worth keeping tabs on your report, but don't pay for access to your own information.

[Mutton Geoff]

I use clear score now which gives you a monthly update and alerts if anything Happens on your file . No fee at all for it seems pretty good .

 i use that as well seems to do the job well

[5Goldstars]

Thought i would treat myself to a new tele from currys so i went to buy it on flexible credit

Computer said no even though i've a full time job and home owner ??

but i'm also a single parent and can only see this as me getting the thumbs down

[redbyrdz]

No five star gold rating then...

[Peabee]

Thought i would treat myself to a new tele from currys so i went to buy it on flexible credit

Computer said no even though i've a full time job and home owner ??

but i'm also a single parent and can only see this as me getting the thumbs down

You need 5 gold stars on rawk first.


Being serious, not sure how they’d know you’re a single parent or why that would cause problems. 

I do know that Wonga have been using data mining to score people from their social media profiles rather than just traditional methods.  What sort of info did they request?

[Barneylfc∗]

Thought i would treat myself to a new tele from currys so i went to buy it on flexible credit

Computer said no even though i've a full time job and home owner ??

but i'm also a single parent and can only see this as me getting the thumbs down

Being a single parent has fuck all to do with it. How's your credit score? Any indiscretions recently? Might be some advice in here https://www.redandwhitekop.com/forum/index.php?topic=305989.40

[QR350]

You could be a millionaire with no history of missing any payments ever and they still wouldn't lend you a quid if your credit rating is crap. Get yourself a credit card that you'll likely be approved for, make small purchases and always make your payments on time and your rating will go up in no time. Then that telly will be yours!

I actually missed a payment last month and my rating went down 200 points, madness how much importance they place on a number that isn't even fully accurate of the person.

[Barneylfc∗]

You could be a millionaire with no history of missing any payments ever and they still wouldn't lend you a quid if your credit rating is crap. Get yourself a credit card that you'll likely be approved for, make small purchases and always make your payments on time and your rating will go up in no time. Then that telly will be yours!

I actually missed a payment last month and my rating went down 200 points, madness how much importance they place on a number that isn't even fully accurate of the person.

Bit of a stretch that. Nearly 5 years since I started this thread and I'm still only on 'fair' with Experian. 4 credit cards all paid off in full. Another £3k credit paid off in full. 2 loans being paid on time every month, and a few other things either fully paid off or being paid on time. Literally haven't missed a payment for anything in over 6 years and still don't have a good rating.

[5Goldstars]

Cheers lads one of their questions was my situation at home? and i have a credit card with a £7,500 limit and also the
5 gold stars is a nod to our 5 European cups rater than trying to big myself up with loads of posts....i don't have time'

[QR350]

Bit of a stretch that. Nearly 5 years since I started this thread and I'm still only on 'fair' with Experian. 4 credit cards all paid off in full. Another £3k credit paid off in full. 2 loans being paid on time every month, and a few other things either fully paid off or being paid on time. Literally haven't missed a payment for anything in over 6 years and still don't have a good rating.

It's ridiculous. Pretty sure they just pull a random 3 figure number out from a hat and give it to you.

[Elmo!]

Bit of a stretch that. Nearly 5 years since I started this thread and I'm still only on 'fair' with Experian. 4 credit cards all paid off in full. Another £3k credit paid off in full. 2 loans being paid on time every month, and a few other things either fully paid off or being paid on time. Literally haven't missed a payment for anything in over 6 years and still don't have a good rating.

Having too many credit cards (even if they have no balance on them) can be a red flag and lower your score.  Could explain why you are still on fair.

[Barneylfc∗]

Having too many credit cards (even if they have no balance on them) can be a red flag and lower your score.  Could explain why you are still on fair.

Over that period of time, not all at once. Only have 2 active ones which are both fully paid off.

[PhaseOfPlay]

Over that period of time, not all at once. Only have 2 active ones which are both fully paid off.

There's your problem, Barney mate. Have a small balance on each one, then pay the minimum plus a bit extra every month, rather than having no credit card debt. Remember, it's a "credit" score, so they need to see that you're responsible with "credit", which is hard to do if you don't have any. Also, try and get another credit card (with a low maximum) and use it for small things, like a weekly sandwich for lunch, or something.

I used to have shite credit, but someone showed me what to do to improve it, and the above was a large part of it. I went from "Fair" to "Excellent" within a year.

[PhaseOfPlay]

Also, do you get hard credit pulls for things regularly? Like mortgages, bank loans, rent, hire-purchase-type-things etc? That affects your score. I found THAT one out the hard way. Also, frequency of CC use. If you have a sudden surge in purchases by CC, that sometimes drops your credit rating for a bit

[rob1966]

Something I found out was that getting a new card will drop your rating for a bit too. I noticed it when I got a new balance transfer card and my experian rating dropped by 250 or something.

[QR350]

Something I found out was that getting a new card will drop your rating for a bit too. I noticed it when I got a new balance transfer card and my experian rating dropped by 250 or something.

That's a huge drop, 250 points just for getting a new card? Mine dropped bt 200 last month just because of one payment that was made a day late.

[5Goldstars]

Checked my credit score on noddle and it was 625 in between good and excellent 

So can't understand why i couldn't get credit

[Barneylfc∗]

Checked my credit score on noddle and it was 625 in between good and excellent 

So can't understand why i couldn't get credit

I wouldn't pay too much attention to Noddle to be honest. Experian or Equifax would be the 2 I see most companies use. My score on Experian as of today is 844, which is only good enough for fair.

I'm 616 on Noddle.

[campioni]

I wouldn't pay too much attention to Noddle to be honest. Experian or Equifax would be the 2 I see most companies use. My score on Experian as of today is 844, which is only good enough for fair.

I'm 616 on Noddle.

Experian score is out of 999, whereas Noddle is out of 710.

[QR350]

How do balance transfers work? I've got a Barclaycard at the moment but the 0% interest period has ran out. Is it possible to transfer the balance onto another card? Or do I still need to pay the interest on this?

[CraigDS]

How do balance transfers work? I've got a Barclaycard at the moment but the 0% interest period has ran out. Is it possible to transfer the balance onto another card? Or do I still need to pay the interest on this?

Apple for a new card with a 0% balance transfer offer. You can often put the details in of your current card/balance and it will pay this off automatically. Then close the old card's account (don't leave it open).

Dead simple to do and worth it so don't pay any interest.

[QR350]

Apple for a new card with a 0% balance transfer offer. You can often put the details in of your current card/balance and it will pay this off automatically. Then close the old card's account (don't leave it open).

Dead simple to do and worth it so don't pay any interest.

Nice one, will do that now

[Alan_X]

Apple for a new card with a 0% balance transfer offer. You can often put the details in of your current card/balance and it will pay this off automatically. Then close the old card's account (don't leave it open).

Dead simple to do and worth it so don't pay any interest.

I've never done it - would it have an impact on your credit score?

Edit*   Found this:

Does transferring a balance from one credit card to another affect your credit score?

Dear James,

If I transfer a balance from one credit card to another, will this affect my credit score?

Andrew, Byfleet

Dear Andrew,

Transferring a credit card balance from one card to another could certainly affect your credit rating, but whether the change would be positive or negative depends on a range of factors, including the timeframe you’re looking at. This is essentially because credit scoring takes account of a wide selection of variables. For example, if you applied for and obtained a new card to facilitate the balance transfer, you might see your credit rating take a temporary plunge because you’d taken on a new credit account. But that effect would be quite short lived.

The longer-term effect of taking on a new account could strengthen your credit history, depending on what other information is available. Another aspect credit scoring will look at is your account utilisation – that is, how much of your available credit you are using each month on what we call your ‘revolving’ accounts. Revolving accounts are usually cards. This calculation applies to individual accounts and to your credit report overall. Low utilisation is generally rewarded through credit scoring.

So, for example, if you shifted a balance of £1000 from a card with a credit limit of £2000 to another card with a £4000 credit limit, the utilisation rate for the account carrying a balance would switch from 50% to 25%, which could boost your credit score. The Experian Credit Score can give you some personal guidance on this.  (April 2016, updated May 2017)

http://www.experian.co.uk/consumer/questions/askjames337.html

[CraigDS]

I've never done it - would it have an impact on your credit score?

As well as the benefits you found, it also allows you to pay down the debt quicker (rather than paying interest). Closing the old account means you don't have a large amount of available credit not being used (some is a positive, but not loads).

[rob1966]

I've never done it - would it have an impact on your credit score?

According to Experian I've got an excellent credit score and I move money from card to card each time the rate ends. I've got about £5.5k on 0% cards at the minute, one has a limit of £6700 and I've got around £4.5k on it and the other has a £6k limit and I've got a grand on it.

I need to close some cards as Craig says, I've some Barclaycards that haven't been used in years.