Using subprime credit cards to fix credit rating

[Amethyst]

how does that work then ?

Say my credit rating is cruddy, i manage to get a credit card at 35% odd, obviously I dont want any debt, but need a better credit rating (so I can get a mortgage at a sensible rate next year), would doing some small shops (like £20) on the card and paying them off immediatly help the credit rating to any extent at all or is the effect so minimal it isnt worth the risk of cocking it up ?

[Caspar]

Re: Using subprime credit cards to fix credit rating

Hiya Ame!

I've just done exactly this taking the view that some improvement is better than none at all.

IF you go Vanquis route (I have) beware of one thing though - if you arrange to pay by direct debit they automatically set your dd to take the minimum payment. You need to phone them to change it so they take the full owed amount.

I spend £20 or less a month and pay in full. Took the view it wouldn't do any harm AS LONG AS you're disciplined enough to pay it all off and not abuse it!

David

xxxx

ps Sure lots will disagree with me and say don't bother - we'll see!

[paulb2905]

Re: Using subprime credit cards to fix credit rating

Ok the other way to go is to get one of the cards that charge for the year but you pay the fee monthly - usually around £50 pa - as you pay it back monthly they are giving you credit for that as well as the use of the card.

The other way to go is to get the Credit Cards that you "load" up with cash - so you put £20/30 onto it and then spend it, reload - rinse - repeat.

Vanquis, Granite, Aqua and ofc Capital One

UK Prepaid card issuers

Compare pay as you go prepaid cards online. Which prepaid card

This one looks particularly good MasterCard prepaid card application | Cashplus

[Amethyst]

Re: Using subprime credit cards to fix credit rating

mmmm I've got a Capital One card on route, was thinking of doing exactly that, spend £20 when i have the money in the bank and pay it direct (by debit card on phone or giro slip over counter) pretty much the instant I spend it. Would never ever have a DD (or standing order) on anything.

I'm a bit paranoidly disciplined now when it comes to credit. If I mess it up once, its going straight in the bin.

[Amethyst]

Re: Using subprime credit cards to fix credit rating

Paul, I have an O2 and virgin prepay cards which I use to put cash on at a paypoint then spend on t'internet shops as and when I need to. do they assist with credit ratings also ?

[Caspar]

Re: Using subprime credit cards to fix credit rating

We're the same! NEVER have anything on credit anymore having learnt / still learning the hard way. Don't think we'll ever be debt free and almost wish someone would make us bankrupt and give us a fresh start nowadays!

Good luck with yours - don't go clothes shopping!!!!!!

[The Debt Star]

Re: Using subprime credit cards to fix credit rating

If I mess it up once, its going straight in the bin.

yes, have the scissors to hand!

would also routinely check your credit score as missing a payment screws up the rating quicker than a default. My GF's rating fell from 850 to 250 because Santander registered 3 late payments (they were consecutive and althjough always paid were late by a few days each time).

[Caspar]

Re: Using subprime credit cards to fix credit rating

Paul, I have an O2 and virgin prepay cards which I use to put cash on at a paypoint then spend on t'internet shops as and when I need to. do they assist with credit ratings also ?

I believe they do.

[Amethyst]

Re: Using subprime credit cards to fix credit rating

Mines just gone up (lol) to 325 and should go up mid summer next year as a few D's fall off, and it will about that time I will be wanting to look at getting a small mortgage, and will probably want to go with birmingham midhsires again as they have been fantastic with my current mortgage. So slightly subprime i guess but I had an extremely good rate (+0.75% on base tracker) for a self cert self employed income at that time (2004).

[enaid]

Re: Using subprime credit cards to fix credit rating

From MSE

If you can't get a card with decent rates or special deals, it's time to look at rebuilding your credit rating. One of the best ways to do this is by getting the right sort of credit card.
By getting any kind of credit, and operating it perfectly (i.e never missing payments, always staying within limit), you can either build up a credit history from scratch, or remedy a tarnished one.
There are two main paths, depending on how bad your rating is in the first place. Before going any further though, there is a vital golden rule...

Strictly repay EVERY month, in FULL, so there's no interest cost.

Borrowing new debt on any of these cards will be hideously expensive and should be avoided at all costs. However, cleverly using one (or even two) of these cards for six to twelve months, spending a little every month and paying it off, can help clean up a muddied credit history, or build one from scratch.

[paulb2905]

Re: Using subprime credit cards to fix credit rating

Ames, yes i belive they do - there was something on the radio ironically a couple weeks ago about just this thing.

Hun, you need to prepared for a shock with mortgage rates.................. they are terrible terrible terrible atm I was a mortgage broker for a couple years before the "Crunch" then the bottom fell out.

The Cashplus Preload Gold CC looks pretty good in all forms


Also on an unrelated thing - Visa Debit cards now give some purchase protection (not as good as the CC) but better than a kick in the teeth

[Amethyst]

Re: Using subprime credit cards to fix credit rating

mmmm well I've been basing any calcs on a 7% rate as I always do, think i was incredibly lucky to have such a good rate on my old mortgage and the dip came at just the right time when my husband and I split and he had to pay the mortgage on his todd. Still water under and thats up for sale now, so when it is sold the funds will be hidden away and make a nice deposit on a new house with, hopefully, only £30k-£40k mortgage.