Looking for some advice about building a credit history

Lyger

Hi all,

I'm a newbie poster here, and a short time time lurker. I found you people about 2 weeks ago. Although I'm living within my means, etc, I've decided that it's time to live below my means in order to actually start saving some money for the day I finally decide to get out of rented accommodation.

What I'm after is a bit of advice, really. There's so much information on this site and forum, that I find it's all kind of muddled together in my head.

Basically, I'm trying to build up a decent credit history. What kick started this was; I had need to get a loan for 3k recently (I needed a new car, the old one was nearing MOT date, I knew it would fail big style, and I'd had it for about 6 years anyway). I got turned down for car finance, and also turned down for a nice cheap post office loan. Eventually, I had to bite the bullet and apply for an online instant loan off HSBC who I bank with, even with the 19.4% apr.

Turns out my credit file isn't exactly fantastic because I don't have much of a credit history. I've only had 1 previous loan, again from HSBC, when I needed a deposit for a flat, all paid off, no issues. I wasn't on the electoral roll, though I've recently sent off the paper work to amend this. The main problem is that I've had to move house 5 times in the last 2 years. Seems to scare people off giving me credit. I've had a lot of bad luck with accomodation since I flew the nest to make my way in the big wide world after uni. My new place is great though, and I now intend to stay put.

With the lack of a credit history and high flight risk issue in mind, I'm wondering if it would be worthwhile me trying to get a credit card just so I could stick my grocery shopping on it, etc. I've looked at some of the credit cards on offer, but I'm not sure which one would be right for me, or even which one would accept me. At this point, I obviously don't want to make a load of applications and end up with a stack of credit checks on my file - I can only see this making my credit file even more unappealing. Am I better off waiting for a while until I've lived where I am for a couple of years before applying for a credit card to build up a credit history? Advice on this would be much appreciated.

Also, (and this is possibly a very silly question) - do the same kind of checks happen when opening an ISA or a Savings account? I ask mainly because I've decided to be serious about saving some money, and holding my current savings in a secondary current account seems somewhat silly to me. However, if I could have similar problems opening an account/ISA, then would I be better off holding off applying for anything? I know the advice on this site is to pay off debt before opening a savings account, but the interest has already been calculated on my current loan (it's attached to my internet banking), so I don't think I'll be losing out by having a savings account running in conjunction in this case. Although if anyone thinks differently, I'd love to hear your advice on this.

I hope someone can steer me onto the best path with this! Thanks in advance! :beer:

dacouch

I have a pay as you go credit card with https://www.mycashplus.co.uk which I find really good. They charge £4.95 a month for having the card, which I personally find well worth it. They offer a service for people wanting to build a credit history where they "Loan" you the £4.95 and then at the end of the year show it as a paid up loan which apparantly helps your credit history. There are details on their website.

Other people may be able to suggest other options as well

poppy_f1

couple of things might help - get a credit card, use it for a small amount and pay off in full every month
catalogue can help as well
contract mobile

savings/isa accounts generally dont help a credit rating - the only checls when opening one of these would ID checks

Lyger

Thanks for the replies, folks!

Nice to know that I should be fine opening a proper savings account and ISA.

I like the idea of that credit card scheme, dacouch, but are there any 'beginner' credit cards that I'd be likely to get without a decent credit history that doesn't hold a monthly charge?

Thanks in advance for any more information!