I’m currently in the process of trying to rebuild my credit score after some youthful fluffups that I’ve been paying for… It’s currently in the low end of ‘fair’ rating so not great but not terrible. I’ve basically had no credit for years, so I figure I need to get some sensibly to show I’m a good prospect.

One of the ways I’m looking at doing it is getting a new smartphone, as my old LG G3 is on its last legs. Notmally I’d just spend £150 – £200 on something nice and midrange, but I’m thinking maybe getting something more expensive on credit might be good for my rating (plus I really like gadgets).

My question is would I be better off getting something on a 24 month contract (like this LG V30 for £27pm over 2 years) OR buying something outright (prooooobably a OnePlus 5T) with a credit card and paying it off over a few months.

There are pros and cons to both (I like the flexibility of a rolling contract and the 5T is a montrously powerful phone but I would get more data than currently if I went 24 month) but the price over two years is pretty similar. I’m more interested in which will do the best to my credit rating.

Any thoughts (and other suggestions to help improve it)?

I would *think* that a well managed credit card would boost your score more than a mobile contract.

if you can afford to pay more than the minimum payment and clear the balance quickly then this is often considered a Good Thing.

i take it you’ve done all the usual things re credit score:

– make sure you’re on electoral roll

– try not to change address or banks too often

– check for any erroneous defaults, judgements etc

– never miss a payment

-try to stay lower than 50% into any credit limit

– check your financial associations and linked addresses

– never take cash out from a credit card

– NEVER take a payday loan (they can kill any mortgage applications for 6 yrs from when taken out

I’m probably telling you what you already know but it’s worth bearing in mind that there’s no overall credit score, more three companies that log your details and obviously lots of lenders who have their own algorithms to tell you to bog off or not. The likes of Experian/Equifax scores are an indicator only.

Take a look on the money saving expert site and sign up to their (free) credit club – lots of explanations as to the various elements of your file

Yeah I’ve done all the obvious bits, but it never does any harm to remind me… TBH my score is actually better (according to the sites I’ve looked at) than expected, so it seems like a good idea to take some sensible credit to build it up a little bit more.

I’ll definitely have a look at the MSE site, I’ve not been on there for a while.

If I did it on a CC I’d be looking to clear it in maybe 6 months or less (paying off a good chunk more than the minimum) which I figured would *probably* be better than a mobile contract – plus I already have a SIM only contract anyway.

One of the reasons I want to improve my score is ‘cos we want to buy a bigger house in a couple of years, so it’s a longish term plan.

I had one black mark on my score which I thought was keeping my score down for years. In this time I’d not had a loan or credit card for anything. I got a new phone on a 2 year deal and this made my score go down initially. I have now got a big loan which I got for home improvements, this has made my score go nearly as high as it can get. I have no idea how it all works but I assume that having this loan and starting to make payments has a better effect than just not borrowing at all. Also I think with the phone it may have had a positive effect but over a longer period of time. So I agree with the post above, a CC which you use regularly and pay off in full each month might have a positive effect. If you need a phone, just get the phone you need/want.

Credit scores are weird things.

I had a pretty average score with no debt at all apart from the mortgage.

Took out a virgin card and bought my last bike interest free for 12 months. Paid it off monthly and my score on all the usual sites is now the maximum it can be.

I would suggest the credit card option is best as then you can decide to pay off sooner. I personally hate being locked into a mobile contract especially for 2 years. I go with plus net £10 for 5 gig data and buy my phones outright.

Never quite sure which works out better, but as an additional thing that might help:

When I was trying to correct the same types of issues, I got one of the Cashplus prepay ‘credit’ cards with their Credit Builder bolt-on thingy. Took the card out, dumped the relevant amount of cash onto it to cover the monthly fee, then didn’t touch it for a year. Shows up as an extra year of paying things of promptly and did a decent job of upgrading my score, at least as far as Experian was concerned. I’m aware that the numbers are a fudge, but it made them go up a decent amount…

I took out a Vanquis credit card a couple of years after I went bankrupt. It really helped to rebuild by credit rating. I just bought my fuel on it every month and paid off in full.

9 yrs down the line my rating is ‘Perfect’ on Noddle.

As said above, most “lenders” will have their own policies and its impossible to tell what matters most to them (nearly and deliberately).

Its all about presenting a low risk view of yourself, people assume, I have no debt and reasonable income means they are low risk, however that isn’t the case…

It doesn’t show that you will then go onto manage your liabilities well, as you don’t currently have any/many.

Having access to, and using “some” credit, but having access to “more” but not using it, whilst paying your liabilities, in the case of a CC more than the minimum, shows that you can and do pay your debts well, so low risk.

it shows that you could get more credit from an existing provider but don’t need to, so are low risk, and by not paying the minimum, shows you can afford more, then by not paying it all off in one go, shows that they can make money off you…

with that in mind, I would go for the CC, hopefully with a limit much higher than you need, and then pay it off at more than the minimum, continue to use it for things like fuel after the mobile is paid off, essentially keeping some balance on it.

Usually the best thing for a credit rating is a mortgage, with a good track record of payment, tho I guess thats probably what your going for…

with that in mind, I would go for the CC, hopefully with a limit much higher than you need, and then pay it off at more than the minimum, continue to use it for things like fuel after the mobile is paid off, essentially keeping some balance on it.

Pay the CC off in full every month if you can – there’s nothing to gain by leaving a “balance” on it and paying interest needlessly.

It’s all about managing your debts and clearing the CC every month demonstrates this.