We get asked the question, Do Pay monthly Credit Catalogues really help your Credit Rating?.
Or does running a Home Shopping Pay Monthly Catalogue damage your Credit Rating?
Firstly, like any form of credit, when you first apply, the Catalogue company is going to search you through a Credit Reference Agency. (Known as a Credit Search) and for that very reason this is going to lower your Credit Score for a short period of time.
Once your account is up and running the Catalogue company is going to update the Credit Reference Agencies by telling them you have opened an account. They will also share your Credit Limit with them and each month will report back informing them whether or not you made your payments on time.
By ensuring you make your repayments on time each month with your pay monthly Catalogue you could be considered for a Credit Limit increase you can also be sure that this is not going to damage your credit rating, in fact, over time, it will start to have a positive effect on your Credit Rating
Just one missed repayment could cause small damage to your credit rating, miss several and you are going to cause damage to your Credit rating that will take several months if not years to repair.
For that reason, many people wonder if running a catalogue account is good for their credit rating. Like other Credit products it depends on how you run the account.
If you are missing payments or making late payments then a Catalogue account will probably be hurting your credit rating.
However, if you are placing regular orders and making repayments on time then you will demonstrating that you are responsible, over time your Catalogue Credit limit should increase, this will be good for your Credit Utilisation too.
A Catalogue is known as a revolving Credit product.
One thing to be aware about is, if you are not placing orders and have a zero balance but have a large Catalogue Credit limit and wish to apply for a Credit Card, your Credit Limit with the Catalogue may be used against you in terms of the limit they will offer.
So it could be worth Closing (or if the account has been opened for a long time) asking them to reduce the Credit limit.
If you are looking to rebuild your Credit Rating after a period of problems, then a Catalogue is a great way to do this.
We have found out first hand that running a Catalogue well improves your Credit Rating and chances of being accepted for Credit Cards, Bank Accounts and Loans. It's important to understand that it's not going to help over night, but over time, keeping a Catalogue account for a long period of time and never missing a repayment is going to have a positive impact on your Credit Rating.
Catalogue companies are also pretty easy to be accepted for. Find out more here.
