How to start building a credit record at 26

humblepii

I recently discovered this forum and, having received some brilliant advice over on the Savings board, wondered whether anyone might be able to help with a question about my boyfriend.

I recently had my LBM and paid off my OD with savings and am working concertedly to pay off a £4750 CC debt - currently spread over 2 0% BT cards - by my 29th birthday in May. After that, I want to start saving for a house deposit in earnest (no mean feat when you live in London!)

My boyfriend and I have been together for 2 years and we'd like to get this mortgage together a few years down the line. The thing is, he is 26 and has very little credit history - never had a CC, no car, etc, only a mobile phone contract. He goes into his overdraft every month.

My question is, would this affect the kind of mortgage rates we are likely to be offered? If so, would it make sense for him to take out a credit card asap for minimal, responsible use to build up his record? And if so, which ones would be the best for someone in his situation?

He's already working towards paying off his overdraft and is quite conservative with money, so no chance of him running up huge debts. It will take a couple of years to get there with the house buying, so we just want to be as organised and informed as possible.

Sorry for the long post, thanks in advance for any help! :beer:

stephane_2

If it is a joint mortgage application then yes it would certainly help if he had some credit history....he needs to start to be more in control of his overdraft, no lender like to see an overdraft used regularly, he needs to control his spending. As for the credit card maybe he should ask his own bank first and see what they say, his current account & overdraft are probably already recorded on his file, he needs to be on the electoral roll before making any kind of credit application. He could also try cards like Vanquis, Capital One or Barclaycard Initial, this cards are specifically design for people with very poor or no history at all, the interest are high, but he should use the card regularly but pay the balance in full each month to avoid any interest, then after 12 to 18 he should be able to obtain a credit card from a mainstream provider..

humblepii

Thanks stephane, that all sounds reasonable and totally do-able! We have both been on the electoral roll at our current property for a year, so that's something... Really appreciate your time, thank you. :T