Credit Card Accounts – Best Management Practice

[ScabHunter]

I thought I would start this thread for the benefit of those people who have reached the stage in their rehabilitation where they are able to obtain a credit card, so that they can attempt to rebuild their credit rating for the future.

I was recently able to qualify for two credit cards, having had one for over a year already. The question is, what is the best way to manage credit card accounts so that they gain the user the greatest possible benefit?

Running up a balance is obviously NOT the way to manage them, that goes without saying. Especially on a Vanquis card with its insanely high interest rate. However, I have heard it said that paying off the balance in full every month is also not the optimum way to manage these accounts. I have to admit that is what I do – every time without exception.

This is not my area of expertise. For the benefit of those who don't know me, I used to have a decent reputation on debt and consumer forums in the old days, but my specialities were writing letters for those threatened with court, and finding little-known alternative solutions for those with damaged credit files who were unable to access mainstream products. I never got involved with credit file rehabilitation.

For those who are experts in this area – what would you advise as the optimum way to manage one or more credit card accounts?

SH

[SXGuy]

Re: Credit Card Accounts – Best Management Practice

What you do, is pay the minimum amount due on the day of your statement, then pay the rest in full the day after. This shows that your overpaying what you need to, and looks good on your credit file.

[Never-In-Doubt]

Re: Credit Card Accounts – Best Management Practice

What you do, is pay the minimum amount due on the day of your statement, then pay the rest in full the day after. This shows that your overpaying what you need to, and looks good on your credit file.

Almost mate.....

To best utilise the CRA data feeds and get an extremely high internal score you must pay more than the minimum. To explain, your credit file is usually updated after your monthly payment date so it reflects the payment made that month. If you have a £2k limit and spend a few hundred each month but pay it off in full then each time the card company reports the feed to the CRA it suggests you have a £2k limit with a £0 balance (as you've paid in full) and had the same the month before, and before that etc etc - so in theory it suggests the account is dormant / unused.

So to combat this you set a DD up to pay the minimum each month, then look at your credit file and check the 'date last updated' against that particular account and then literally pay the balance after that date (via online banking / however you fancy really). This will then update on the following monthly feed as settled and as paying the minimum plus extra, it basically boosts your score with the CRA's as it suggests you pay the minimum on time then settle the rest of the balance at a later date with a second and additional payment. Your credit file will show a small carry-forward balance which, in the account history, will record that it was paid a few days after statement due date - so the searching company will know you're a good risk as you manage your accounts extremely well.

That's the only way to boost your internal score with a lender and/or credit agencies.....

[SA Gold]

Re: Credit Card Accounts – Best Management Practice

So to combat this you set a DD up to pay the minimum each month, then look at your credit file and check the 'date last updated' against that particular account and then literally pay the balance after that date (via online banking / however you fancy really).

For those of us who don't check our credit file for the sake of starting the cauldron up () - i take it what i have been doing (dd set to minimum and paying a 2-3 days after is ok, or do they all vary?


(sorry if its a bit pedantic, but i am a keen student )

[Never-In-Doubt]

Re: Credit Card Accounts – Best Management Practice

What does YOUR credit file read? £0 balance lol if so then start paying the rest a few days later. Ideal time is a week after payment due date as the feed update occurs within that period.

[SA Gold]

Re: Credit Card Accounts – Best Management Practice

What does YOUR credit file read?

Haven't been near it for years mate. Printed it out just before going UE

Ideal time is a week after payment due date as the feed update occurs within that period.

noted, thanks mucka.

[Beefy1976]

Re: Credit Card Accounts – Best Management Practice

I managed to get a Barclaycard with a 0% offer for 18 months.

I used the card to put some things I normally pay by direct debit such as the house insurance. I let the minimum payment go out by direct debit each month and then pay an additional amount at some point throughout the month. I also still have my Aqua card which gives me 0.5% cash back so I used that for my day to day expenditure and the full balance goes out via direct debit.

Does it matter that the Barclaycard is on 0% interest or will it still make me look like a good boy?

My final default comes off in February and my fixed rate mortgage is up in March so I am trying to do all I can to make sure I have a good change of getting a better rate on my mortgage.

Cheers,
Beefy

[Never-In-Doubt]

Re: Credit Card Accounts – Best Management Practice

You're playing the game very well - keep it up

[Beefy1976]

Re: Credit Card Accounts – Best Management Practice

You're playing the game very well - keep it up

That's good to hear, thank you