Rebuilding a poor credit rating takes time. Luckily there is a financial product that can help you to rebuild your credit; this is by way of credit building credit cards UK.
So how do you go about making the most of credit cards aimed at helping you to rebuild your credit rating?
- Choose your credit card carefully;
- Use the credit card wisely;
- Hold onto the card as credit history accounts affect the rating;
- Apply the 30% Rule of Spending;
- Pay in full each month.
Choose Your Card Carefully
One of the first, perhaps most essential tips, is to choose a credit card carefully in the first place. We can help you to find and compare credit cards with the lenders we work with. The lenders we work with offer competitive rates, which get you off to a great start when looking for a card to help you rebuild your rating
We work alongside lenders offering credit cards specifically to help you improve your credit score. This means you are more likely to be approved for a card even if your credit rating is poor. Bear in mind every time you apply for a credit card it affects your credit file, even if you are turned down. Only applying for a card with lenders who are more likely to approve you is a great start. We can help you to find a card suitable for your needs with a competitive APR.
Use Credit Building Credit Cards UK Wisely
Once you have your shiny new credit card in your hands it can be tempting to go out and splurge. However, bear in mind that splurging may have been what helped to earn you a poor credit rating in the past. With this in mind when using a credit card to rebuild your rating you should use the card wisely. By being responsible with your new card you can build your credit rating back up. Think twice before using the credit card to pay for something, ask yourself if you can do without before reaching for the card and swiping it.
Stick With the Same Card
Lenders like people who are predictable. With this in mind the longer you use your credit card and keep it up to date with the repayments the more predictable you will seem to the lenders. Therefore once you have taken out a card to help rebuild your rating keep the account open along with active by spending wisely on it as outlined above. While it is ok to move to another credit card with a balance transfer to take advantage of 0% interest, only look into this once your credit rating has started to improve and never do it continuously.
The 30% Rule – Spend a Percentage of the Credit
The 30% rule should be applied to the credit limit offered. This rule simply means you should not spend over 30% of the limit. This is due to the fact it shows lenders you are being responsible.
The credit limit offered will vary from lender to lender. Sometimes having a large credit limit is not a good thing, especially while you are rebuilding your credit rating and/or have got into financial difficulties before. As above it can be tempting to spend, spend, and spend on a credit card. However, in order to prove you are responsible and can manage money, only use a percentage of the credit limit available.
Spend What You Can Pay Off Each Month
Finally, only spend what you can reasonably afford to pay off in full each month. This again shows control of spending.
Using credit building credit cards UK as mentioned above can help you to improve and rebuild your failing credit score. Find out how Bonsai Finance can help you today.