Read on Twitter
DONT MAKE THIS MISTAKE I MADE WITH MY CREDIT FILE
Two positive factors credit rating agencies look for is a low credit utilisation and a long standing relationship with a lender
So when I cancelled my oldest credit card to ātidy upā my report my credit score ranked
Two positive factors credit rating agencies look for is a low credit utilisation and a long standing relationship with a lender
So when I cancelled my oldest credit card to ātidy upā my report my credit score ranked
I started trying to improve my credit rating while in university so I got one of those vanquis cards and started using it to buy stuff and pay it off instantly on the app
My credit rating got good enough to get a credit card with my bank but then I cancelled the vanquis one
My credit rating got good enough to get a credit card with my bank but then I cancelled the vanquis one
āCredit utilisationā is so important to your credit score
It basically assesses the amount of credit you have available compared to what you are using
High utilisation - using Ā£4.5k of your Ā£5k credit available
Low utilisation - using Ā£150 of your Ā£5k credit available
It basically assesses the amount of credit you have available compared to what you are using
High utilisation - using Ā£4.5k of your Ā£5k credit available
Low utilisation - using Ā£150 of your Ā£5k credit available
Now one of the obvious ways to keep this low is to not spend too much, however, credit utilisation assesses your credit AVAILABLE across all cards
Check out the scenario below
Check out the scenario below
You have two credit cards
1) Ā£3,000 balance and a Ā£4,000 credit limit
2) Ā£50 balance and a Ā£11,000 credit limit
Total of Ā£3,050 balance and Ā£15,000 credit limit
Credit utilisation is 20% (low)
1) Ā£3,000 balance and a Ā£4,000 credit limit
2) Ā£50 balance and a Ā£11,000 credit limit
Total of Ā£3,050 balance and Ā£15,000 credit limit
Credit utilisation is 20% (low)
However, if you say let me clear that second credit card and cancel it to (tidy up) my credit file your new credit utilisation is as follows
Total of Ā£3,000 balance and Ā£4000 credit limit
Credit utilisation is 75% (high)
Total of Ā£3,000 balance and Ā£4000 credit limit
Credit utilisation is 75% (high)
Now itās important to note that this wonāt have a completely negative impact on everybody
In fact, while working as a mortgage broker what I found is that people who have had car finance or loans Iām the past that have been settled will always find it easier to get accepted
In fact, while working as a mortgage broker what I found is that people who have had car finance or loans Iām the past that have been settled will always find it easier to get accepted
In the scenario I described in the beginning I was looking to buy my first home and I guess the point is because you have no history they can only go on what they see - so you really have to tip toe, make sure every move is correct because reductions in credit score can stop you
Sorry this aināt even a thread Iām just tweeting lol
But yeah to make it clear again - ppl that are homeowners will be less impacted by reduction in credit score, 3 hard searches within a month can stop a FTB but a current homeowner may still be cool
But yeah to make it clear again - ppl that are homeowners will be less impacted by reduction in credit score, 3 hard searches within a month can stop a FTB but a current homeowner may still be cool
