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How should I be using a credit card to improve my credit rating? watch

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    Basically i've just got a credit card for the purpose of improving my credit rating, i've only a £250 limit but was wondering what people feel is the best way of spending on it to improve my rating.
    Should i make small purchase on it, little and often? Or is buying something on it once a month enough?
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    I tend to use it for things over £100 because of the extra protection I get.

    My dad did tell me that if I don't use it that often, they can decrease my credit limit.
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    Using it for a few small purchases each month is enough. Try to keep your credit balance always below 30% of your available credit (£75 for you), be sure to pay it off every month. Eventually your credit rating will rise. Also ensure you're on the electoral roll, it's one of the biggest contributing factors to a high credit score. Doing this demonstrates not only punctuality but money management as well, as of recent, (since ~2 years ago) for sizeable loans (car / mortgage, etc) by law lenders have to take into account your debt to income/credit ratio so it's crucial to keep an eye on this from the beginning.
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    (Original post by NX172)
    Using it for a few small purchases each month is enough. Try to keep your credit balance always below 30% of your available credit (£75 for you), be sure to pay it off every month. Eventually your credit rating will rise. Also ensure you're on the electoral roll, it's one of the biggest contributing factors to a high credit score. Doing this demonstrates not only punctuality but money management as well, as of recent, (since ~2 years ago) for sizeable loans (car / mortgage, etc) by law lenders have to take into account your debt to income/credit ratio so it's crucial to keep an eye on this from the beginning.
    I've been on the electoral roll for a good 3 years now . £75 of spending seems like a reasonable amount, might just start sticking food and toiletries on it. Currently my income is purely from part time wages as I'm a part time student so my income to credit ratio wont be getting me any loans anytime soon (i do have other credit in the form of a catalogue account but thats it) , but hope to do whatever's possible now to make it easier for us to get a mortgage once i've graduated and got decent full time work.

    (Original post by Tiger Rag)
    I tend to use it for things over £100 because of the extra protection I get.

    My dad did tell me that if I don't use it that often, they can decrease my credit limit.
    I certainly dont want them to reduce it so want to try and use it often enough. Is that extra protection only for Visa cards?
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    (Original post by claireestelle)
    Basically i've just got a credit card for the purpose of improving my credit rating, i've only a £250 limit but was wondering what people feel is the best way of spending on it to improve my rating.
    Should i make small purchase on it, little and often? Or is buying something on it once a month enough?
    Which credit card are you using?
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    (Original post by AngryRedhead)
    Which credit card are you using?
    An aqua one, my bank wasn't willing to give me one on part time hours despite me having my savings with them for a good two years:P
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    (Original post by claireestelle)
    An aqua one, my bank wasn't willing to give me one on part time hours despite me having my savings with them for a good two years:P
    Typical bank, you trust them with your money but they don't trust you

    Forgive me if this is a stupid question but do you have to pay off the entire £250 each month or just what you spend on it? My mother always avoided credit cards as if they were the plague so I'm clueless haha
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    (Original post by AngryRedhead)
    Typical bank, you trust them with your money but they don't trust you

    Forgive me if this is a stupid question but do you have to pay off the entire £250 each month or just what you spend on it? My mother always avoided credit cards as if they were the plague so I'm clueless haha
    Unfortunately banks are like that, as long as they decide to trust us as loyal customers with a mortgage in 2 or 3 years time then i m not too annoyed with them:P
    Just what you spend on it I can basically have up to -£250 on it at one time.
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    (Original post by claireestelle)
    Unfortunately banks are like that, as long as they decide to trust us as loyal customers with a mortgage in 2 or 3 years time then i m not too annoyed with them:P
    Just what you spend on it I can basically have up to -£250 on it at one time.
    Thank you so much

    Might go and get myself one now
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    (Original post by AngryRedhead)
    Thank you so much

    Might go and get myself one now
    If you havent had much credit before, you might want to see if your bank will let you have a student one, otherwise you'll probably have a pretty bad interest rate but as long as you pay it back you'll be fine
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    (Original post by claireestelle)
    If you havent had much credit before, you might want to see if your bank will let you have a student one, otherwise you'll probably have a pretty bad interest rate but as long as you pay it back you'll be fine
    Like yourself, I've already tried my bank, they said no.
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    (Original post by AngryRedhead)
    Like yourself, I've already tried my bank, they said no.
    I wonder if we happen to have the same bank:P
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    (Original post by claireestelle)
    I wonder if we happen to have the same bank:P
    Maybe so. Which one do you use?
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    (Original post by AngryRedhead)
    Maybe so. Which one do you use?
    Lloyds
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    (Original post by claireestelle)
    Lloyds
    Bingo :rofl:
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    (Original post by claireestelle)
    I certainly dont want them to reduce it so want to try and use it often enough. Is that extra protection only for Visa cards?
    It's only for credit cards.

    Some companies will charge you if you use your credit card, rather than your debit card for purchases. I've also had to use my credit card if I've left my debit card at home. But generally, I use it for more expensive items.
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    (Original post by Tiger Rag)
    It's only for credit cards.

    Some companies will charge you if you use your credit card, rather than your debit card for purchases. I've also had to use my credit card if I've left my debit card at home. But generally, I use it for more expensive items.
    Oh i see, there arent many expensive items i need at the moment but will keep the protection available in mind
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    (Original post by AngryRedhead)
    Like yourself, I've already tried my bank, they said no.
    Have you tried other banks?
 
 
 
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