Building up a credit score with a credit card, help.

Hi everyone,

I'm looking to get a car on finance within the next year (currently taking driving lessons) and I need a good credit score. I have looked at ways to build this up and a lot of people say get a credit card, but I'm a little confused. I know with a credit card you can borrow money but you need to pay it back fast. I have a few questions I would like to know.

1) Should I put all my money on a credit card, or transfer some on to a credit card.
2) How do I pay back what I borrowed? Do I just put what I owe on the credit card?
3) How fast should I pay what i owe back?

I think thats all for now,

Thanks everyone

You don't put any money "on a credit card". It provides credit.

To use a credit card to help your credit rating is easy (in theory) but difficult for some people in practice.

Basically - you use it to buy anything and everything you'd normally buy with cash. Don't (DON'T!) buy things you wouldn't normally buy with cash.... that's the first difficult part of having a credit card. For example you might be given a £500 credit limit - and then it's tempting to spend £500 on toys and games (or going out). Don't!

You'll get a statement/bill every month showing every transaction - how much each was and who it was paid to. E.g. "Tesco, £2.50" (That was yesterday's sandwich) Typically you pay the bill online banking or by cheque. The credit card will have it's own online banking website.

If (and you always should!) you pay the full amount off by the due date (that's the other difficult part of having a credit card) then over 6 months or so that will definitely help your credit score. Some people say you should leave a small amount (e.g. £50) "to improve your credit score". That's bullsiht; that does two things. It costs you interest, and it does nothing good for your credit score. (I did some work for Experian a few years ago and found out a lot about credit scores..... folks who leave £50 or £100 on their card each month are known as "fools"

If you don't pay the full amount then whatever isn't paid off is still owed, and you'll pay interest. (OUCH)

I've been using credit cards for ...many... years (I'm a *very* mature student) and have an excellent credit score, because I've always paid the bill off in full each month. About a year ago I bought a car and because my credit score is so high, the finance deal actually made me money - by taking £4k of credit the price I paid on the day I picked it up was reduced by £8k - £4k because that was how much was on credit (which I have to pay back) and £4k as a reward for using credit to pay for the car

T3

You don't put any money "on a credit card". It provides credit.

To use a credit card to help your credit rating is easy (in theory) but difficult for some people in practice.

Basically - you use it to buy anything and everything you'd normally buy with cash. Don't (DON'T!) buy things you wouldn't normally buy with cash.... that's the first difficult part of having a credit card. For example you might be given a £500 credit limit - and then it's tempting to spend £500 on toys and games (or going out). Don't!

You'll get a statement/bill every month showing every transaction - how much each was and who it was paid to. E.g. "Tesco, £2.50" (That was yesterday's sandwich) Typically you pay the bill online banking or by cheque. The credit card will have it's own online banking website.

If (and you always should!) you pay the full amount off by the due date (that's the other difficult part of having a credit card) then over 6 months or so that will definitely help your credit score. Some people say you should leave a small amount (e.g. £50) "to improve your credit score". That's bullsiht; that does two things. It costs you interest, and it does nothing good for your credit score. (I did some work for Experian a few years ago and found out a lot about credit scores..... folks who leave £50 or £100 on their card each month are known as "fools"

If you don't pay the full amount then whatever isn't paid off is still owed, and you'll pay interest. (OUCH)

I've been using credit cards for ...many... years (I'm a *very* mature student) and have an excellent credit score, because I've always paid the bill off in full each month. About a year ago I bought a car and because my credit score is so high, the finance deal actually made me money - by taking £4k of credit the price I paid on the day I picked it up was reduced by £8k - £4k because that was how much was on credit (which I have to pay back) and £4k as a reward for using credit to pay for the car

T3