In trying to increase my credit score, which is best, cancelling my credit cards or...?

reducing the balance to zero? Also, are there any other ways I can increase my credit rating over the next couple of months? I have no CCJs, and last time I looked, my credit score was 720 out of 1000 on Experian. All help welcome please! I want to apply for a mortgage in a few months time. I generally pay my balances in full every month, but should I reduce everything to zero and just do my food shopping and petrol on 1 card, then pay it off every month, using cash for everything else, or cancel the other cards, just using the 1 for food and petrol? I never spend more than i can afford to pay in 1 month, so can easily pay for things in cash instead, cards are just more convenient and mean i dont have to go to the machine every 5 minutes.

Public Comments

1. The best way to improve your credit rating is to spend on your credit cards, but make sure you pay off the full balance at the end of each month.
2. Don't cancel the cards. Pay them down to zero. The credit score will actually decrease if you cancel the card, because that is credit available to you that you could tap if necessary. Therefore creditors see you as more likely to pay your bills. Also, pay on time. Don't take out any new credit cards or store accounts.
3. Unfortunately the way to increase your credit rating is with credit cards and personal loans. Mad I know, but when you eventually do own your own home your credit score will be fine. But I don't think a low credit score will affect you getting a mortgage, that's all to do with how much you earn and your outgoings, so don't go mad with those credit cards.
4. try the Martin Lewis site he is very good
5. A good way to increase your credit score is to always pay your accounts on time while at the same time paying them off 'towards' zero in chunks over the next few months. The credit card companies / banks start to view you as a prefered customer who never defaults, so they never have to persue you for payments. You'll know that this is working when they start offering you increased credit limits without you asking for them. I say 'towards' because you can apply for your mortgage before to actually pay them all out (the credit cards that is). In the finance world it's an amazing paradox that it's easier to borrow more morney when you already owe some on credit (personal loans, credit cards, etc, than if you owe nothing on credit. You may be required to close some of your credit card accounts as part of approval for your mortgage, but you would count that worth while since the goal of getting your mortgage is achieved. Even after you get your mortgage, you'll find credit card companies mailing you all kinds of offers whether you want them or not.
6. make purchases that you can pay off each month on your credit card, i believe this will score well. if possible dont just pay the minimum amount, dont miss any payments or pay late, and dont forget any application you make will leave a 'footprint' on your credit file.
7. Ok, ok, ok - here is the SUCKMTR0CKET 3 step plan to a better credit rating (I used to sell mobile phones so I had to learn this)- 1. Go to your bank and ask them to change your debit card to a Visa Electron or basic cash card. Using these kind of cards - rather than Maestro or Visa Debit - will steadily increase your credit rating 2. Keep your credit card but be clever with it. Having money on a credit card, but making sure you never default on it, is actually a really good way to boost your credit rating! One idea is to just rack up a couple of hundred quid on it and then just set a direct debit up to pay off your minimum amount every month. 3. Never go into an un-authorised overdraft. Firstly because, as you probvably know, you get a horrible fine, but secondly because it will immediatly make you seem more of a risk to give credit to. If you stick to these rules you will be well on your way to a good credit score in 3-6 months. Believe me, i did it myself...kind of wishing i didn't though, I am now crippled by debt! ;)
8. If you are UK then visit the website below. Very good info on credit rating. There is a lot more to it than just credit though, like being registered on the Voters Roll. You should check your complete history with Experian in case there is an old default you've forgotten about. Best not to have too many credit cards. Looks bad. But a couple that are paid every month. It doesn't matter if they are paid off in full and the system doesn't note that info, just that the minimum payment is met in time. Also too many credit checks are considered bad too. Its not all about the score either. Read Martin Lewis. He explains it best...