Thoughts on using a loan to improve credit rating

dgtazzman

Hi all,

my situation is that I have only lived in the UK for 15 months after moving here to be with my girlfriend from the Netherlands. She lived with me there for a year, but all in all she was more comfortable in the UK and it didn't make much difference for me as I could just keep my job and move to the UK. Having a mother from Wales and beeing brought up speaking English, I'm quite happy living in the UK.

One big issue we're bumping into is lack of credit history/credit rating in the UK. My girlfriend had some very bumpy finances when she was a student, but we cleaned those up and her record is clean as a whistle for the past 3 years now.

Eventhough my record is clean, I know I need to work to get my/our rating up as we will be wanting to get ourselves a mortage 2 or 3 years down the road (probably 3, just to be sure all my gf's bad history has cleared off her long term record).

We will be needing a 'new' car this Summer, as I don't think our current banger is gonna cut it come MOT time. We only bought it as an emergency measure because our other car turned out to be at the point of snapping in 2 while driving it.

Would it be worth considering getting a joint loan for this car (or at least trying) for 1 year and paying that off as a means of raising our credit rating instead of just buying the car outright. We could get it with our bank I hope, as I've then been with them for nearly 2 years and my gf has banked with them for over a decade, both in good standing. Wouldn't be a big loan and the money to pay it off in full will be comfortably sitting in my bank account ready to go. Also, might this improve our relationship with our bank even further, thus making them more likely to offer us products from further up the chain?

I realise this is an expensive way of raising credit rating, but I'm just trying to find ways to get it up before mortage time. We've both now gotten credit builder credit cards, pay all our bills on time every time by direct debit (including mobile phone bills), registered on the electoral roll, ... basicly doing everything we can.

I know a 0% intrest card would be brilliant for this, but I doubt either of us will qualify for one yet, I did try 2 months ago in the belief they'd look at my credit history in the Netherlands and failed miserably, hence why we've now gone for Capital One cards.

Any thoughts on this are appreciated.

[Deleted User]

your gf has a bad credit rating,you have no job....chances of a loan 0.00001%

jonesMUFCforever

I'll go even further - its a stupid idea!

dgtazzman

Don't know where you got the 'no job' from, I've been employed for the same company for near 7 years now and and making very good money, getting promoted next month that will add another 10k a year to the wages for starters.

Girlfriend's credit history has been top notch for the last 3 years, both our credit reports show nothing but nice little green icons, only thing working against us is the duration of the history within the UK as she lived with me abroad for a year, breaking her UK history. Even in her 'bad' student days, she never really got into that much trouble, just did a lot of juggling, don't think she got any defaults to her name, none showed up on her credit file anyway.

I never said it was a great idea, I was just wondering if it would raise our credit rating in the long term.

It's not a question of having bad credit history, it's a question of not having enough on our records to show we're good borrowers, though that is slowly building up now with our history of paying mobile phone bills, insurance payments etc. on time every time without fail.

Anyway, the question behind this post was not whether we'd get a loan, that's would be in the hands of the powers that be, the question was would a loan taken out and paid off like a good little responsible borrower serve as a way to show the good folks at the credit reference agencies what wonderfull potential customers we would be for their clients. I know paying a few hundred pounds for this idea might seem expensive, but if it serves to eventually knock down the rate we're going to pay for a mortage, it's nothing.

CLAPTON

just get a CC; use it regularly; pay in full each month
your credit rating will improve and it costs you nothing... result

dgtazzman

In the process of doing that, just trying to be creative with ways to speed up the process ^^

It would be so much easier if they just cross referenced credit history internationally, would save so much hassle of starting from scratch again.

Did try to buy our new sofa on a 3-year intrest free deal to help the credit file allong, but 3 years credit/address history is the magic number and I'm not there yet So ended up having to just pay for it outright as their computer system wouldn't take addresses outside of the UK in the address history fields.

Admitadly I am making some progress though, LTSB let me upgrade to a silver account, which is a sign things are improving.

[Deleted User]

sorry i misread the bit about work...appologies