How can I improve credit rating

justrachel

Hello all, I am hoping someone can give me some advice on how to improve my credit rating.

I am working full time and have never had credit of any sort, I have no outstanding debts and have always paid my direct debits on time.

However....I have been refused a credit card from my bank and can't get a catalogue.

How do I gain credit if I have no history ?

Thanks for reading.

keadd

Hi Rachel.
Are you registered to vote at your address?

izools

Yes indeed first things first, you need to register to vote at your address. Once that has gone through (takes 30-90 days to appear on the electoral role after registering depending on time of year), you need to get a "Sub-Prime" credit card or two.

The four to choose from are Vanquis, Capital One Classic, Barclaycard Initial, and Aqua.

Out of the four, my favourites are Barclaycard and Aqua, but of course as things are Vanquis and Capital One are easiest to get.

See which ones you can get and once they have been open for a year you should have enough history to get a "proper" credit card.

Given that the four cards mentioned carry a high interest rate, and are designed for credit building, I'd only recommend taking them out if you are prepared to set up a direct debit to pay the full balance each month to avoid being charged interest, and just use the cards a little, as a credit building exercise.

Good luck, and keep us posted

justrachel

I have recently moved and only sent off my electoral roll letter last week, Maybe this will explain why I am being refused credit.

Thanks for the replies.

izools

That won't be the only reason.

You won't get mainstream credit until you have built some repayment history with a "Starter" or "Sub-Prime" credit card. And remember, every credit application you make leaves a footprint on your credit file lowering your score.

Two or fewer applications in a six month period is good, three to six is OK as long as you have other positive data on your report (you don't - no other credit accounts), and more than six applications for credit in a six month period is looked upon very unfavourably by creditors.

Save worsening your chances for no reason, look at taking out a sub prime card as I listed above after you've appeared on the electoral role - given the time of year I'd wait until February - and once you've built up a year or so of positive repayment history on a couple of these credit cards, that should be enough for a mainstream creditor to consider you for a competitive credit product

Good luck, and keep us posted