First Credit Card For Someone With No Credit History??

charlie12

mleonard79 wrote:

...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!

Indeed

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?)

Yeah that would be fine, you can do balance transfers between people, just bear in mind that he'll be responsible for the "debt" regardless of where the funds go. Egg Money is ideal as you can transfer the funds to a savings account and stooze. If you are already clued up on stoozing then by all means go for it, once he's built up some credit history with a sub prime card then he will be in a good position to apply for a 0% card with a decent limit.

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!

Good idea!

mleonard79

Thanks Charlie - good to have some reasurance! Think I've now got a good idea of what to do for him now

I think perhaps applying for one from the bank he has his main current account with may be the best idea for his first card then - it's A&L, do you think they would be likely to give him one? You would think they would look at the fact he pays weekly wages in to them and has a balance of nearly £4k in his current account plus £6k in an ISA with them and another £2k in a 10% saver. That's got to look good to them you would think! Will get the credit files checked first though just in case.


As for the stoozing - will def do that for him once he's built a bit of a credit history, you think 6 months is long enough to leave it before applying for a 0% card?

Good idea!

Thanks, I thought so - any way to make a few pennies the MSE way

charlie12

mleonard79 wrote:

it's A&L, do you think they would be likely to give him one?

It's definitely worth a try, I don't have any experience with A&L but hopefully they will base their decision on his previous "internal" history. Even if he gets declined, he has a good case for appeal - send a letter detailing how long he's been with them, info about balances and perfect history, reasons for wanting the card, and offer to send proof of income. If this fails then go for one of the cards I listed.

Will get the credit files checked first though just in case.

Yes, this should be done before anything else.

As for the stoozing - will def do that for him once he's built a bit of a credit history, you think 6 months is long enough to leave it before applying for a 0% card?

I can't say for certain but a minimum of 6 months is the usual recommendation, all banks have different scoring methods. If he gets declined on say 2 applications (even after appealing) after 6 months then wait another few months and try again.

YorkshireBoy

charlie12 wrote:

It's definitely worth a try, I don't have any experience with A&L but hopefully they will base their decision on his previous "internal" history. Even if he gets declined, he has a good case for appeal - send a letter detailing how long he's been with them, info about balances and perfect history, and offer to send proof of income. If this fails then go for one of the cards I listed.

It might not be as straight forward as this though, since the A&L card is run by MBNA.

It'll depend on how much, if any, influence A&L can exert over MBNA if he's initially declined because of his lack of history.

If MBNA are taking all the risk, they won't really care how much savings are with A&L.

charlie12

YorkshireBoy wrote:

It might not be as straight forward as this though, since the A&L card is run by MBNA.

Ah yes, good point YB, I wasn't sure if A&L offered their own card.

mleonard79

Hi YB,

Thanks for pointing that out. I think it's probably worth the risk to start with anyway. If he gets turned down then we'll know we need to go for one of those other sub prime cards mentioned above. At the very least it'll add a search!

YorkshireBoy

At the risk of complicating things further...

You say he has nearly £4K in his current account (which seems a lot unless it's with the Coventry BS or similar).

In parallel with (or instead of) the A&L application, how about using the 'back-door' approach to an Egg Money card? This approach was popular with MSE'ers earlier this year and involved opening an Egg Savings account (currently pays 4.5% but may rise with the BOE rate change?), depositing some funds, maybe adding a little extra regularly each month, and then applying for the Egg Money card as an existing customer. It seemed to have a fairly good success rate, and even worked for me!

Something to consider perhaps?

loulou58

What id do is start off small, dont stooze straight away. At 18 with no credit history at all i applied to Capital One and got accepted straight away, and i got a £500 limit, pretty small but it was a start plus i was only young. I got the advise to not use it for major things. Set up a minimum payment Direct Debit and put say £5 a month on it (£5 is usually the minimum payment, but check with your issuer) each month this £5 would be repayed automatically. To the CC company your using it,and repaying in full each month,therefore your a good debtor which = good credit rating and = bigger limits. Im only 22 now and doing this i now have myself a 10,000 limit on that same card. After a few months you'll either be offered a higher limit, or you can apply elsewhere and possibly start at a higher limit. Good luck.

Broke_Student

This morning i recieved my first credit card from Natwest. The credit limit is £500. I was accepted online immediately but do hold a current account with them.

I am 18 years old, unemployed, not a student (lazying about on a gap year) and have no income if that helps.

techno_geek

I've been with HSBC since I was 15 (don't worry, they're not my main account provider any more!), and a couple of days after my 18th birthday I went to my local branch to apply for a credit card.

Obviously I had no credit history or anything, and no income as I was still at college, but they accepted me without any credit checks as they saw I had handled my account well... I got a limit of £250, which they increased after 6 months, and again last month.

Also, despite being new to credit and paying off the balance in full each month, I got a rate of 18.9% from the outset which is much better than the 29.9% offered by the Capital One Classic card. If you've handled your account well, chances are your bank will be quite lenient...

Hope this helps!!