Signed up to booster account and used it for a small purchase £145 pounds.
I don’t really understand the concept of this account or am I missing something? So I transferred 145…credit line of 145.
The whole payment went out for the purchase obviously then I’m asked how long to split payments for, am I paying tymit another so many months payment on top of what I’ve transferred?
Slightly confused at the moment
Welcome to the Tymit Community. Booster is really new so the team will appreciate your feedback
The way booster works is the money you deposit becomes your credit limit
So for example you give Tymit £500
They will give you a line of credit of £500
If you make a purchase you can spread the repayments or pay it in full at the end of each month when your statement generates
In the future if you are accepted for the main product you will get your £500 secure deposit refunded
I hope I have explained that well
£145 transferred was collateral held in trust.
Now you have a credit line of £145, which you spend and repay as if it was a normal credit card, and split repayments of.
If you close the account, or get accepted to the main card the collateral will be returned to you.
It is possible that you can exceed your collateral. For example interest & offline transactions may add up to more than collateral. Thus if you don’t repay the credit card payments, you can not only loose the collateral but also rank up further debt.
All banking is based on mutual trust. With booster card collateral sweetens the trust.
Thanks James:+1: appreciate it
Just so you know, you are not charged interest on any balances with the Booster card, one of the reasons there is a monthly fee, so you can split any purchases for as long as you want. The downside is that you only have a credit line equal to your deposit, so if your limit is £145 and you have bought something that costs £145 and split the payments over 12 months, it means you will only have £12.08 available credit after a months payment and your credit utilisation is at 92%. This is what will be reported to credit agencies!
If you are trying to get a good credit score then you want your utilisation ideally at no more than 25%!
Personally I think there are better Credit building products out there, but if you have opted for this, then at least use it right, keep the utilisation low, make your monthly payments on time, sign up for Martin’s MoneySavingCredit club to keep an eye on your Experian score as currently they are the only one Tymit report to and hopefully your score improves in the next 6 months.
Most (sensible) lenders will look at utilisation along with limits also, as more and more people are being offered entry cards and starter overdrafts.
Having a low utilisation can also be a red flag as it will certainly be a higher risk for a credit provider. The golden rule for credit building is just to utilise something so it’s reported.
- Utilization is a risk to lenders. If your statement generates and your using over 75% if drops your score by 4-130 points
To play the credit game you need to let your statement generate before paying back. This reports you using the credit and paying on time to agencies
You need to use your credit limit sparingly
Always pay more or all of your balance each month. Try not to run a balance for a long period of time or this will be looked at as " Persistent debt"
Transunion is really good at giving you good and bad factors to help you get your score up
Here’s an example when I maxed out my Barclaycard last year to test the theory about utilization
Well done for getting your utilisation down over time, that is a good indicator to a lender.
Using too little of your credit line is a risk factor for new lines of credit. However the utilisation history over say 3, 6, and 12 months will certainly factor into this also.
Many lenders are now using what they call “improving profile” provided by credit reference agencies. I know TransUnion and Experian both offer improving profile results to lenders. This metric gives lenders the ability to see how someone’s credit utilisation, repayment, and score, are factoring into a change in profile. Most lenders will just look to see if this is increasing or decreasing but those with good score cards will look at the trend from start to finish.
Holding a balance demonstrates you can manage credit well, and while running such a high utilisation rate isn’t good, utilising 0% of your credit line will not always allow you to achieve new credit lines.
This is way off topic now ha ha
Nah I never kept it maxed out I paid it off on the statement date. Never do that
Ok. Some people don’t realise that if you always pay off in full, it doesn’t always make you attractive to lenders either
Sure they make money still but not nearly as much ha ha.
I dislike Credit and Credit Scores. It’s such a hard game to cheat
Totally agree with you! I much prefer new credit reference agencies like Credit Kudos who utilise open banking to understand your spending, verify your income and rent, and verify bank accounts.
With credit reports being roughly 6 weeks old, Open Banking being instant at the time of application, it’s a much better metric of how risky someone is to lend to. Not the total solution but in my opinion it’s better.
Yeah there’s lots of new Loan Providers doing it including Koyo.
However I don’t think it would be working in someone’s favour when they declined your application for spending too much money on JustEat
It is more sophisticated around this, regarding disposable income.
It looks at things such as variance of payments (does your employer often pay you late, do you randomly sent your housemate rent irregularly), identifying regular income (your mate pays you back £50 every week), and if you cycle into overdraft on a regular basis.
There’s so much more but your JustEat obsession is safe with me
I’ve worked out when paying in there are 2 options to add funds 1st one is to increase credit limit and when go to add funds to pay bill its different bank details them ones will pay amount to pay off what spent rather than increase credit limit was confusing at first but worked it out now lol
Glad you worked it out @Jackamo2009
The different accounts will be required for storing your matched funds in an segregated client account.
All I can say is…thanks to tymit for giving people a chance I can see this working for me big time
Awesome! I’m pleased you enjoy Tymit as much as I do.