Early Pitfalls

creditcardvirgin

Hello and help! I've never had a credit card before and I've already been stung by the system. I did a few online questionnaires about cards (including the one on this site) and was told that the best kind of card for me would be a cashback card. I duly applied for the Barclaycard cashback card but was declined. I was given a link to an advisor who told me that this was probably because I don't have any kind of credit rating (I don't have an overdraft, mortgage, etc). But now I've been declined I can't apply for a different card for another 6 months! What else don't I know and what kind of card should I be applying for?!! All advice welcome as no one at the actual card firms has actually given me personal advice yet - they just parrot the details of the cards back at me.

lisyloo

Have you obtained your credit records yet.
I would advise you get Experian and Equifax statutory reports at £2 each.
Are you on the electoral role?

Do you have a bank account?
Sometimes it's best to get a credit card from your bank as they have internal history on you and if that's ok they are more likely to help.
Other methods of building up history are to use a mobile phone contract or cataloague account for a while.

creditcardvirgin

Barclays are my bank! I just have a current account with them. And yes, on the electorial role. How would I use my mobile phone contract?

Moggles_2

If this would be your first credit card, you have a limited credit history, so from the lender's perspective you're something of an unknown quantity. They are likely to see your lack of a payment history as too great a risk.

As the bank that holds your main current account has turned you down, the solution is to apply for a starter credit card like Vanquis. This provider specialises in cards for those with next to no credit history.
Note: interest rates are high, but if you only ever spend what you can afford to pay back on time each month, you'll never pay interest or fees.
www.vanquis.co.uk
Once you've operated this card for 12 months, you'll find it easier to get the cards and credit limits you want.

For tips to improve your chances of credit card acceptance, have a look at the *Credit Rating: how it works and how to improve it guide*, especially Martin's *Manage and Improve your credit score* article

http://www.moneysavingexpert.com/banking/credit-rating-credit-score#improve

lisyloo

How would I use my mobile phone contract?

If you have a DD contract (as opposed to PAYG) then it's a credit agreement (because you pay in arrears).
Hence each month the operator will be reporting to the credit reference agencies.
This should be on your credit report so provided you've paid on time, you should have a string on "on time" payments which is good history and shows you can manage credit.
If you have made late payments, these will be shown too and that's bad.

Payment history is one thing that lenders look at.
There are other things too - like how long you've been at your present address and of course your income.

leachyd

lisyloo wrote: »

Have you obtained your credit records yet.
I would advise you get Experian and Equifax statutory reports at £2 each.
Are you on the electoral role?

Do you have a bank account?
Sometimes it's best to get a credit card from your bank as they have internal history on you and if that's ok they are more likely to help.
Other methods of building up history are to use a mobile phone contract or cataloague account for a while.

Or, you can make use of free trials on both equifax and credit expert - just make sure you cancel if you dont ish to continue them. You need to check both, as they may hold different data as not all institutions report to both. Callcredit(?) are the other agency, but im not sure how widely used they are.


As mentioned, best products are "credit builder" cards that have high rates, but as long as you payoff in full each month, you;ll attract no interest. Then you'll build up a credit background and can apply for more useful credit products.

D

malkie76

It's unlikely you'll get much on your credit report if you don't have a credit report. As others point out the lack of credit history counts against you.

Having a DD mobile account will help, as will any bills you pay in credit in your name at your current address (ie gas, electricity, TV etc bills).

Doing that well for 6 months to a year will give you enough rating to get you a card, but please ask yourself if you genuinely need one!

lisyloo

Or, you can make use of free trials on both equifax and credit expert

You can do, but some people have had trouble cancelling especially with Equifax.
You know, hanging on the phone for 40 minutes etc.
It not being done and then plenty more money being taken (a lot more than £2).

If you can afford £4 without hardshuip then I would recommend paying £4 and not signing up to these schemes.

You can get callcredit for free at https://www.annualcreditreport.co.uk and you don't need to supply payment details or sign up to anything but be aware it's not that reliable on it's own.

It's unlikely you'll get much on your credit report if you don't have a credit report

But you can check that electoral role etc. is registered correctly.

lisyloo

Or, you can make use of free trials on both equifax and credit expert

You can do, but some people have had trouble cancelling especially with Equifax.
You know, hanging on the phone for 40 minutes etc.
It not being done and then plenty more money being taken (a lot more than £2).

If you can afford £4 without hardshuip then I would recommend paying £4 and not signing up to these schemes.

It's unlikely you'll get much on your credit report if you don't have a credit report

But you can check that electoral role etc. is registered correctly and that there is nothing incorrect that's negative towards you.

creditcardvirgin

Thanks for all the advice! I think one problem might be that my rent is all inclusive so I don't actually pay any bills. The only reasons I really want to sign up is so that I have an alternative to my debit card in case of emergencies and so I have purchase protection as I've lost out on a couple of flight cancellations and as my interest free overdraft has finally been taken away from me I could do with a bit of extra credit!

lr1277

creditcardvirgin wrote: »

Thanks for all the advice! I think one problem might be that my rent is all inclusive so I don't actually pay any bills. The only reasons I really want to sign up is so that I have an alternative to my debit card in case of emergencies and so I have purchase protection as I've lost out on a couple of flight cancellations and as my interest free overdraft has finally been taken away from me I could do with a bit of extra credit!

If you continually use your overdraft to borrow, then don't get something like Vanquis, because of its high rates. It looks like you are wanting a low life of balance card. As I don't know which of these cards can be got by a new borrower, you may want to ask a new question on this board.