Credit score

[Chris340gti]

So I have a loan and a credit card. To improve my credit score is it better to pay into the credit card to get the balance to below 25% of credit limit . Or pay off the small loan in full ?? Would mean paying 1k into credit card or 1600 into the loan ..

Thanks in advance

[Djtemeka]

I’d say credit card and then reduce the available balance given to you.

Loans have an end date. Cards don’t

[randlemarcus]

For the purposes of gaming your credit score upwards, definitely the card. The loan will continue to give positive reports to the agencies all the while, and getting your card balance down will help pump it up a bit. If you're looking to make yourself look better for getting a new debt, then your mileage may vary, as then Debt to Income etc come into play.

[Sarnie]

Djtemeka said:

I’d say credit card and then reduce the available balance given to you.

Loans have an end date. Cards don’t

Pay the card down but do not reduce the limit as that defeats the object....

[Mercdriver]

Mine is marked down because I do not have a loan, house paid up and cars bought for cash.

Use credit card for everything and clear at end of month so I am down marked because I don’t have any debt seems strange, I am proving I live within my means

[phil-sti]

Chris340gti said:

So I have a loan and a credit card. To improve my credit score is it better to pay into the credit card to get the balance to below 25% of credit limit . Or pay off the small loan in full ?? Would mean paying 1k into credit card or 1600 into the loan ..

Thanks in advance

Pay the card down and leave a balance, then get a couple more but don't use them. For some strange reason a low percentage of total available short term credit pushes up your score. Also mobile phones, internet broadband etc all help

[Sarnie]

Mercdriver said:

Mine is marked down because I do not have a loan, house paid up and cars bought for cash.

Use credit card for everything and clear at end of month so I am down marked because I don’t have any debt seems strange, I am proving I live within my means

It's not strange, it's a "credit" score and you don't have any credit.........

[worsy]

I regularly use Credit Karma to check my score. It suggested I have a credit line of 20k and use less than 20% of that availability. For years my card allowed me 10k of credit so I asked for it to be increased and once I had done my score shot up by 5 or 6 points.

[Crudeoink]

Mercdriver said:

Mine is marked down because I do not have a loan, house paid up and cars bought for cash.

Use credit card for everything and clear at end of month so I am down marked because I don’t have any debt seems strange, I am proving I live within my means

Just like new drivers, you're more of an unknown and therefore more risky to lenders. I dont really see my credit card balance as debt as I always have the money to pay it off, but prefer the protection on offer when buying with credit

[Sarnie]

worsy said:

I regularly use Credit Karma to check my score. It suggested I have a credit line of 20k and use less than 20% of that availability. For years my card allowed me 10k of credit so I asked for it to be increased and once I had done my score shot up by 5 or 6 points.

It's called credit utilisation.......the lower it is, the better for your credit score, hence why it's bad advice to reduce credit limits.....

[Simpo Two]

Mercdriver said:

Mine is marked down because I do not have a loan, house paid up and cars bought for cash.

Use credit card for everything and clear at end of month so I am down marked because I don’t have any debt seems strange, I am proving I live within my means

You're proving they can't make money out of you, so you're no use to them.

[Mercdriver]

That is good to know

[ferret50]

Never, ever miss a repayment!

[Chris340gti]

Thank you guys, I shall pay the credit card cheers

[Gordon Hill]

Mercdriver said:

Mine is marked down because I do not have a loan, house paid up and cars bought for cash.

Use credit card for everything and clear at end of month so I am down marked because I don’t have any debt seems strange, I am proving I live within my means

Same here but I've done a credit score check with my bank and 3 others and mine comes out as excellent, not that I'm in need of credit but it's good to know. Love to know how accurate Experien, Clearscore and Natwest are.

[clockworks]

My credit score went down 2 months ago because I used PayPal "friends and family", funded from a credit card, to send £25 to someone (with good feedback for selling said item) on a car forum for some carpet mats.

I had no idea that it would count as a "cash withdrawal", and be bad for my credit score, as well as incurring interest on the card.
I've done the same thing many times over the years, not had this happen before. Rules changed? Doesn't happen with normal "goods and services" PayPal transactions.

Score also went down when I switched one of my current accounts (from Halifax, to First Direct), presumably because it closed the credit card with the old bank?

[eliot]

clockworks said:

My credit score went down 2 months ago because I used PayPal "friends and family", funded from a credit card, to send £25 to someone (with good feedback for selling said item) on a car forum for some carpet mats.

I had no idea that it would count as a "cash withdrawal", and be bad for my credit score, as well as incurring interest on the card.
I've done the same thing many times over the years, not had this happen before. Rules changed? Doesn't happen with normal "goods and services" PayPal transactions.

Score also went down when I switched one of my current accounts (from Halifax, to First Direct), presumably because it closed the credit card with the old bank?

hmm i may of done the same thing unwittingly

[Killer2005]

clockworks said:

Score also went down when I switched one of my current accounts (from Halifax, to First Direct), presumably because it closed the credit card with the old bank?

Your account would have gone from (assuming no missed payments
000000000000
To
0

Less history and gives a lower score. New accounts along with a closed credit card would also bring it down a little.

[Sarnie]

clockworks said:

My credit score went down 2 months ago because I used PayPal "friends and family", funded from a credit card, to send £25 to someone (with good feedback for selling said item) on a car forum for some carpet mats.

I had no idea that it would count as a "cash withdrawal", and be bad for my credit score, as well as incurring interest on the card.
I've done the same thing many times over the years, not had this happen before. Rules changed? Doesn't happen with normal "goods and services" PayPal transactions.

Score also went down when I switched one of my current accounts (from Halifax, to First Direct), presumably because it closed the credit card with the old bank?

It doesn't happen with "normal" goods and services paypal transactions, that come from funds in a current account. Doing it from a credit card, you are in essence going to a cash point and withdrawing money from a credit card and giving it to someone. Cash advances from a credit card lower your score because it's perceived that you are living beyond your means.

Closing of a credit card, reduces your credit utilisation, a new bank account means a credit search against you and a new account opening.....all reduce your credit score.

[clockworks]

Sarnie said:

It doesn't happen with "normal" goods and services paypal transactions, that come from funds in a current account. Doing it from a credit card, you are in essence going to a cash point and withdrawing money from a credit card and giving it to someone. Cash advances from a credit card lower your score because it's perceived that you are living beyond your means.

Closing of a credit card, reduces your credit utilisation, a new bank account means a credit search against you and a new account opening.....all reduce your credit score.

I've always funded my PayPal account from the same credit card. It gets used several times a month. The only transaction that went through as "cash withdrawal" was the "friends and family" one.

I guess it has changed because it saves PayPal paying the merchant fee when they aren't making a percentage on the transaction?