Will getting a credit card improve our credit rating?

[fudgywudgy]

Dh and I married young (and stupid!) raked up thousands in cc's that took years of blood sweat and tears to pay of.

We swore we would never get another cc/loan again and for the last ten years have been lucky enough to borrow money %free when needed from my parents.

We are now thinking of buying our first home next year but have a poor credit rating due to being stupid before and not taking credit out since.

Dh was at the bank a few days ago and they have offered him a new cc card, I will never let us get into bother with them again but the bank thinks this is a good way to build our credit rating?

Was thinking of just paying petrol on it every month (maybe about £100 per month) then paying it off un full when the bill arrives.

Will this work or is the bank secretly hoping we spent the £5000 credit limit to screw us for interest?

a bit of both i think! i use my credit card a couple of times a year only and put about £60-£70 on it each time. i then pay approx £20/25 a month off it until its paid and then have a couple of months with nothing on it and spend on it again. i usually use it to treat myself to something, eg just bought a book which cost £40, before that it was some new curtains - things i dont really need, that way i dont get used to using my credit card and thus depending on it. i also use it when i book a holiday (but only when i have the money in the bank first) then i pay it straight off - it gives me the added protection if things go wrong such as holiday companies going bust. other than i have no other debt (other than my mortgage) so see it as away of keeping in "the good books" with my bank.

I have a credit card for internet shopping (extra protection) but generally put it into a credit balance before spending on it. Unless you can be absolutely certain you can control your spending and repayments Id avoid at all costs (and I work in a Bank!) ... it just takes one or two mistakes with it to start descending a slippery slope.

well, you could ask for a £200 max credit limit, which would restrict your spending on it.

I put everything on my credit card, which is paid off in full automatically by direct debit each month - I do it because I get points and I get a month interest free credit (which in reality isn't worth a lot).
BUT I only spend what I know I can afford to buy, so I am not using it for extra money, just as a method of spending the money I have.

Unless you are certain that you would treat it as money in the bank, rather than extra money, then I wouldn't get one.

Yes. Definitely.

We have just returned from 20 year stay abroad and can't get a mortgage cause we have no credit rating.

Get it and do your shopping with it. Pay it off every month.

Are you both on electoral roll? Do you pay anything with direct debit? Mobile phone?

It's not just credit cards, but it seems to be one way of getting a better rating.

Just make sure you can't borrow on it - maybe ask for a limit?

Only you know whether you can trust yourselves. If you can then a credit card can help your rating and give you added protection.

Rather than taking out the CC that the bank offers, look for one that pays cashback or gives some other rewards and then - crucial - set up a direct debit to pay it off in full each month. That way you can improve your credit rating, gain confidence in managing a small amount of debt responsibly and make a few quid at the same time.

There's no way a bank would give you a new credit card with 5000 limit if you have bad a credit history.

Well they have iisaro

I did not think about asking to lower the credit limit, will call them this afternoon and ask.

Well, the high credit limit is good as far as building credit rating goes, so dont lower it!

Use the card wisely for six months, pay it off every month, it shows the banks, and credit reference agencies that you can handle debt and repayments.

I am no expert, but they once explained to me that bottom rank is a person who:
Has no credit card (so no history of repayments), rents fully furnished (cannot afford own furniture), so I was told to always say Renting unfurnished when forms asked this, as it would look better, and to list my credit cards, because then they could find out from the credit card company whether we were able to handle repayments or not.