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Sooo confused. Need help from seasoned credit experts!
moneysavingallday
Posts: 615 Forumite
in Credit cards
I was brought up to believe that credit = bad and saving up and paying in cash = good. This meant that I ended up without having hardly any credit history at all because I put everything on my debit card and never ran up an overdraft.
It was only when I went mortgage shopping that the mortgage advisor told me my credit file was "too thin" for someone my age. At that time all it had on it was my mobile phone account (for some reason my bank account wasn't reporting to the CRAs). She told me that I need to start building a strong credit history.
I am not precisely sure how to do that. I managed to get approved for my first credit card last week, through HSBC. They also approved me for a £2000 personal loan. So hopefulyl those two products will be reporting to my CRA files soon. My mobile phone is on there too and so is my bank account now.
Does this sound like enough for the time being? Is it enough to leave it at that and just sit back and watch the green 0s accumulate? Or should I be trying to get additional card like Capital One or Vanquis? Or a mail order catalogue?
I don't want to overdo it and have too much credit but I do want to start building a really strong credit history.
It was only when I went mortgage shopping that the mortgage advisor told me my credit file was "too thin" for someone my age. At that time all it had on it was my mobile phone account (for some reason my bank account wasn't reporting to the CRAs). She told me that I need to start building a strong credit history.
I am not precisely sure how to do that. I managed to get approved for my first credit card last week, through HSBC. They also approved me for a £2000 personal loan. So hopefulyl those two products will be reporting to my CRA files soon. My mobile phone is on there too and so is my bank account now.
Does this sound like enough for the time being? Is it enough to leave it at that and just sit back and watch the green 0s accumulate? Or should I be trying to get additional card like Capital One or Vanquis? Or a mail order catalogue?
I don't want to overdo it and have too much credit but I do want to start building a really strong credit history.
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Comments
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Hi,
If you already have a cc with a decent limit and loan, then I would suggest getting a catalogue. Try Littlewoods or Next, and they report to all 3 CRAS every month which will help your file. For what it's worth, I have had a Littlewoods catalogue since August and have never bought a thing, yet they're still reporting nice green zeros. Once you've got a good 6-12 month history, then it should be easier to get a decent mortgage
HTH0 -
Just use the CC regularly for things you buy anyway (maybe petrol or something like that), set up a DD for the full amount and so pay no interest and you never forget to pay.
I dont understand about the loan...do you mean you have taken one out (bad move) or merely been 'approved' for one?
maybe apply for another CC in 3-6 months time .. maybe a cash back card and that should be sufficient0 -
Just use the CC regularly for things you buy anyway (maybe petrol or something like that), set up a DD for the full amount and so pay no interest and you never forget to pay.
I dont understand about the loan...do you mean you have taken one out (bad move) or merely been 'approved' for one?
Hi. I actually took a loan out for £2000. Why is it a really bad move? I'm within the time period where I can cancel the agreement and give the money back if for some reason it is a really bad move?0 -
Sammy_Girl wrote: »Hi,
If you already have a cc with a decent limit and loan, then I would suggest getting a catalogue. Try Littlewoods or Next, and they report to all 3 CRAS every month which will help your file. For what it's worth, I have had a Littlewoods catalogue since August and have never bought a thing, yet they're still reporting nice green zeros. Once you've got a good 6-12 month history, then it should be easier to get a decent mortgage
HTH
hi Sammy, I've been considering the NExt Directory. Not sure how stringent they are in credit scoring but I may well apply. Thanks for your suggestions
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Is there anything you want to do with the loan? It's a very expensive way to build credit history....moneysavingallday wrote: »Hi. I actually took a loan out for £2000. Why is it a really bad move? I'm within the time period where I can cancel the agreement and give the money back if for some reason it is a really bad move?Kavanne
Nuns! Nuns! Reverse!
'I do my job, do you do yours?'0 -
no needto do more than the c/card (is ussed and paid in full), and loan- i hpe you have spent the money wisely, or shuffled it into a Bank of Gordon (er,, I mean England) approved account..?Long time away from MSE, been dealing real life stuff..
Sometimes seen lurking on the compers forum :-)0 -
moneysavingallday wrote: »Hi. I actually took a loan out for £2000. Why is it a really bad move? I'm within the time period where I can cancel the agreement and give the money back if for some reason it is a really bad move?
slow down a bit
what sort of mortgage advisor did you see
no proper advisor (working in your interest) would suggest taking out a loan (and paying interest) just to build credit history
credit history with a CC or two (used as already described) , a bank a/c or two, maybe a contract mobile phone is more than adaquate to get the best rates on a mortgage.
actual debts i.e. loans will make it more difficult to get a good mortgage0 -
brightonman123 wrote: »no needto do more than the c/card (is ussed and paid in full), and loan- i hpe you have spent the money wisely, or shuffled it into a Bank of Gordon (er,, I mean England) approved account..?
The loan's sitting in a savings account.0 -
slow down a bit
what sort of mortgage advisor did you see
no proper advisor (working in your interest) would suggest taking out a loan (and paying interest) just to build credit history
credit history with a CC or two (used as already described) , a bank a/c or two, maybe a contract mobile phone is more than adaquate to get the best rates on a mortgage.
actual debts i.e. loans will make it more difficult to get a good mortgage
the loan's paid off by the time i start applying for mortgages so it shows as a paid loan which I'd have thought is good.0 -
Yeah but what is the APR, like 15%? It's sitting in a savings account at 4% and you are losing a LOT of money.moneysavingallday wrote: »the loan's paid off by the time i start applying for mortgages so it shows as a paid loan which I'd have thought is good.Kavanne
Nuns! Nuns! Reverse!
'I do my job, do you do yours?'0
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