The Student Room Group

does spending on a credit card affect credit history?

i use credit cards for rewards, credit building and spending protection

but idc too much about the first or last of those and when i look at my credit report i see the only records on there simply indicate that my credit accounts are current with payment. nothing to do with actually using the card

so if were to stop using the credit card and just leave it in the drawer, would my credit be just as strong as if i were to use it regularly? i basically cba with having multiple different cards in my wallet and prefer spending from my current account. i don't have a need for a credit card (eg covering shortfall)
Reply 1
If you don't use the credit on your credit card the issuer can reduce your credit limit. It can be useful to rotate your credit cards, and use just one card exclusively each month for spending (and security for a payment) and then pay it off in full each month. Use another credit card at the start of the new month and pay that off completely at the end of that month, so you keep rotating them and use them all. It is not so much that you don't need credit, more that you can be trusted to use available credit within the terms of your agreement.

Credit reference agencies have a full overview of what credit you have been provided with and how you use credit at any one time (e.g. missed payments, over your credit limit etc). Your credit history can be a very useful foundation if you can use your cards wisely - it shows you can manage credit sensibly and carefully.

When you need a mortgage your credit status is very important. Other times it may be for personal finance on a car or other contract.
Original post by Muttly
If you don't use the credit on your credit card the issuer can reduce your credit limit. It can be useful to rotate your credit cards, and use just one card exclusively each month for spending (and security for a payment) and then pay it off in full each month. Use another credit card at the start of the new month and pay that off completely at the end of that month, so you keep rotating them and use them all. It is not so much that you don't need credit, more that you can be trusted to use available credit within the terms of your agreement.

Credit reference agencies have a full overview of what credit you have been provided with and how you use credit at any one time (e.g. missed payments, over your credit limit etc). Your credit history can be a very useful foundation if you can use your cards wisely - it shows you can manage credit sensibly and carefully.

When you need a mortgage your credit status is very important. Other times it may be for personal finance on a car or other contract.

I didn't know that the bank could reduce your credit limit if you haven't used it for a while. Is that a thing?
Reply 3
Original post by HoldThisL
i use credit cards for rewards, credit building and spending protection

but idc too much about the first or last of those and when i look at my credit report i see the only records on there simply indicate that my credit accounts are current with payment. nothing to do with actually using the card


What credit report are you looking at?

The last time I requested a statutory credit report, for each of my cards I had 6 years of history, with the following columns for each month:

Current balance

Statement balance

Credit limit

Payment amount

Number of cash advances

Value of cash advances



so if were to stop using the credit card and just leave it in the drawer, would my credit be just as strong as if i were to use it regularly? i basically cba with having multiple different cards in my wallet and prefer spending from my current account. i don't have a need for a credit card (eg covering shortfall)

I suspect that having credit available to you, using it responsibly, and showing that you pay the bills on time and in full is probably a better "look" to a lender than having credit available and not using it at all.
Reply 4
Original post by Kutie Karen
I didn't know that the bank could reduce your credit limit if you haven't used it for a while. Is that a thing?


Definitely and they may also increase your limit if you use it regularly and stay up to date with payments.
Original post by nutz99
Definitely and they may also increase your limit if you use it regularly and stay up to date with payments.


ok. didn't know that and good to know.:smile:
Reply 6
Original post by martin7
What credit report are you looking at?

The last time I requested a statutory credit report, for each of my cards I had 6 years of history, with the following columns for each month:

Current balance

Statement balance

Credit limit

Payment amount

Number of cash advances

Value of cash advances



I suspect that having credit available to you, using it responsibly, and showing that you pay the bills on time and in full is probably a better "look" to a lender than having credit available and not using it at all.


my equifax and experian reports just show the credit limit and a calendar of whether payment was made/missed etc (and smaller details like current balance). maybe i am not seeing a full version of my report although this one is about 20 pages

if lenders can/do factor in actual usage of a credit account then that answers my question i suppose
(edited 10 months ago)
Original post by HoldThisL
my equifax and experian reports just show the credit limit and a calendar of whether payment was made/missed etc (and smaller details like current balance). maybe i am not seeing a full version of my report although this one is about 20 pages

if lenders can/do factor in actual usage of a credit account then that answers my question i suppose


I signed up for MSE's credit club to monitor loan eligibility. It's a good tool as it combines the equifax and experian data, and also offer tips to improve your credit file.

https://www.moneysavingexpert.com/creditclub/
Reply 8
Original post by normaw
I signed up for MSE's credit club to monitor loan eligibility. It's a good tool as it combines the equifax and experian data, and also offer tips to improve your credit file.

https://www.moneysavingexpert.com/creditclub/


and from this i learn:

"Debt to income ratio: This amber rating could be for one of two reasons your debts are either quite high compared with your income, or 'too low'. ... If this doesn’t sound like you, then this amber status may be because you have little or no credit. Bizarrely, this can put lenders off, because if you don’t have any credit, they don’t have a reliable indicator of whether you handle it well."

lmao i hate this system

thanks all
Original post by Muttly
If you don't use the credit on your credit card the issuer can reduce your credit limit. It can be useful to rotate your credit cards, and use just one card exclusively each month for spending (and security for a payment) and then pay it off in full each month. Use another credit card at the start of the new month and pay that off completely at the end of that month, so you keep rotating them and use them all. It is not so much that you don't need credit, more that you can be trusted to use available credit within the terms of your agreement.

Credit reference agencies have a full overview of what credit you have been provided with and how you use credit at any one time (e.g. missed payments, over your credit limit etc). Your credit history can be a very useful foundation if you can use your cards wisely - it shows you can manage credit sensibly and carefully.

When you need a Fee Checkers for mortgage your credit status is very important. Other times it may be for personal finance on a car or other contract.


Hey, whenever I try to pay university fee through my credit card, it shows too much transaction fees, what's the solution? I want to save my bucks.
(edited 10 months ago)
Original post by Neil Wangner
Hey, whenever I try to pay university fee through my credit card, it shows too much transaction fees, what's the solution? I want to save my bucks.


A bank transfer.
Original post by Neil Wangner
Hey, whenever I try to pay university fee through my credit card, it shows too much transaction fees, what's the solution? I want to save my bucks.

what transaction fees?
Reply 12
Original post by Neil Wangner
Hey, whenever I try to pay university fee through my credit card, it shows too much transaction fees, what's the solution? I want to save my bucks.

Is this an international transaction -- for example, are you paying fees to a UK university using a credit card issued outside the UK?

For international transactions, there are typically two costs: (1) the foreign exchange rate (for example, converting US Dollars into Pounds Sterling); and (2) a transaction fee levied by the card, perhaps 2.75% of the transaction.

There's not much you can do about the exchange rate if you're paying a charge denominated in one currency on a card that uses another currency. But you might be able to find a credit card that doesn't charge a transaction fee for international transactions.

Otherwise, as @normaw suggests, you could look at paying by bank transfer -- but that might also incur fees and currency exchange costs.
Original post by martin7
Is this an international transaction -- for example, are you paying fees to a UK university using a credit card issued outside the UK?

For international transactions, there are typically two costs: (1) the foreign exchange rate (for example, converting US Dollars into Pounds Sterling); and (2) a transaction fee levied by the card, perhaps 2.75% of the transaction.

There's not much you can do about the exchange rate if you're paying a charge denominated in one currency on a card that uses another currency. But you might be able to find a credit card that doesn't charge a transaction fee for international transactions.

Otherwise, as @normaw suggests, you could look at paying by bank transfer -- but that might also incur fees and currency exchange costs.


Yep done with it and bank is much affordable option.

Quick Reply

Latest

Trending

Trending