First Credit Card For Someone With No Credit History??

mleonard79

Hi everyone,

My brother has never had a credit card or any credit before for anything at all so I'm assuming there'll be nothing in his credit file. He wants to apply for a credit card (possibly to be used for stoozing or possibly just for cashback purposes). I'm wondering which are the best ones to apply to for someone with no credit history as such?? He works for Royal Mail and earns a decent salary and also has a good amount of savings so that should be a plus point for him but I know a lot of places aren't keen on giving you credit when you've never had any. Of course as another plus point he's obviously never had any adverse credit problems or missed a payment on anything! I think this is a good idea for him in order to build up some sort of credit history and show he's reliable in case he needs to apply for something big in the future such as a mortgage! Just interested to know who is most likely to accept him and give him a decent credit limit? Thanks for any suggestions.

poppy_f1

maybe try his bank if he hasnt had any credit in the past, they can easily see his income etc

carly

My daughter got an Egg Money card with no credit history. Applied online and got immediate acceptance. Admittedly not a huge credit limit but she only wanted it for savings . Couldnt get a savings account online as had never worked before and moved house 5 times in as many years ( as a student )

mleonard79

Hi there,

His bank currently is A&L but he's only been with them 6 months and before that he was with RBS (he's still got that account.) However I don't think either of those have any decent deals on credit cards at the mo

As for the Egg Money account - yeah I have one of those and I'm pretty sure he would get it but as he doesn't need it for savings since they're tied up in ISA's and 10% savers I don't think there's much point going for that one. I don't think they give good limits out on it in general.

Thanks for the help and any more suggestions are very welcome!

jay78

I got an egg card with no credit history.

mleonard79

I hadn't thought of an egg card itself as I didn't think it had particularly competitive deals - plus can you balance transfer from egg card to egg money? I wouldn't have thought so. Nice to get another idea though!

To put the question another way - which cards should he definitely avoid applying for? Which are guaranteed to turn him down or give him really low credit limits? Thanks.

charlie12

First step, order credit reports from Equifax and Experian for £2 each, never assume that you have no history - you'll be surprised what might show up. It may contain information about other household members and there could be errors that you should get corrected first BEFORE applying for credit.

After that's sorted, you should be aiming for the sub prime cards to get your foot in the door (so to speak). I think it's unlikely that you'll get a "competitive deal" initially, though you may be lucky. Even if you manage to get an Egg card for example, the limit is likely to be low due to no credit history.

I recommend you start off with a sub prime card, such as...

Barclaycard initial (I like this one - helped 2 "no history" friends out)
Capital one classic
Vanquis
Aqua

or one issued by your current bank

... then make your purchases on one of these, and pay it off in full each month. After 6 months or so you'll be in a better position to apply for a better card with a low rate and better limits.

Remember the first step is to get a card, ANY card, the limit and interest rate is irrelevant at this stage as you will be paying off in full and not using it for BTs/stoozing etc.

mleonard79

Thanks Charlie,

That's a pretty good rundown - it's for my brother not me (I've had numerous cards, some current accounts and contract mobiles for years so my own credit rating should be ok.) I hadn't even thought about the fact he might have wrong info on his credit files - that's a good point. There should be absolutely nothing on his file as he has never applied for anything other than 2 current accounts, an ISA and a savings account (but as he didn't ask for any overdraft I doubt he'd have been searched for the current accounts, would he? Also I'm pretty sure you don't get searched for ISA's or savings!)

So once I've checked his file you think just getting any card he can for 6 months would be best and then build from there. The only problem is he doesn't make a great deal of purchases to be honest (hence why I was thinking doing a balance transfer at 0% and then he'd be paying something every month? Will let you know how he gets on. Thanks for the advice.

Regards

Michelle

charlie12

mleonard79 wrote:

There should be absolutely nothing on his file as he has never applied for anything other than 2 current accounts, an ISA and a savings account (but as he didn't ask for any overdraft I doubt he'd have been searched for the current accounts, would he? Also I'm pretty sure you don't get searched for ISA's or savings!)

It's difficult to know for sure as banks have different procedures. There may be one or two credit searches, or they might be "unrecorded enquiries" which are just address/ID checks which are commonly used for savings accounts. A company doing a credit search cannot see these unrecorded enquiries but they do see credit searches. If there are any credit searches, and if they are relatively old (6 months or older) then they are unlikely to have much of an effect for new applications. Regardless, it's well worth spending the £4 to check the reports first to confirm things like electoral roll status, correct address/date of birth and errors/info from other household members.

So once I've checked his file you think just getting any card he can for 6 months would be best and then build from there. The only problem is he doesn't make a great deal of purchases to be honest (hence why I was thinking doing a balance transfer at 0% and then he'd be paying something every month?

Yes, get one of the sub prime cards listed to start with. You don't need to max out the card, just make one or two purchases a month. The idea is to get into the routine of making purchases, waiting for the statement, then paying it off in full. This will build history on the credit record.

I wouldn't recommend going for a 0% card to start with, but you could use up a "search" and try I suppose, but remember that every search will make the next application harder to get accepted for. As I mentioned earlier, if you do manage to get a 0% card, the limit is likely to be low and you'll most likely have to pay a fee to do a balance transfer. Though you may be able to offset this fee by stoozing. But to stooze you need an SBT card, and do lots of reading

mleonard79

Hi Charlie,

Yep will def check his files first and then apply for a regular card first and get him to build up a bit of credit - it's all for getting him a good credit rating at the end of the day in case he needs to get a mortgage or anything big at a later stage - I know this would be almost impossible with no credit rating! As for the 0% card - I was thinking of tranferring the money to my egg money card and to savings account from there (as far as I know the egg money card doesn't need to be in his name does it?) I'm reasonably clued up on stoozing already and have done a ton of reading but I understand he wouldn't make much with it due to his lack of previous credit but a few pennies along the way to a better credit rating was the idea! Thanks for all the pointers - very helpful!

mrcow

Hi

Has he got a debit card with his bank accounts?

I know that it's not good for 0% deals, balance transfers or anything like that, but assuming that he has no bad credit history, I've been told a few times that a Debenhams store card is a good place to start. Don't ask me why (please!) but I know a few people who have been turned down for other credit, but were still able to get a Debenhams card to help build up a credit file.

Has anyone else heard of this before? Or am I believing some sort of urban myth?! :rolleyes: