Credit Rating

Minky2Slice

Hi there,

I am quite sure that I am posting this thread in the totally wrong place - but I have no Idea where to actually post this question - so I hope that it can be moved to the right place! PLEASE!

I just wanted to ask a simple question about good credit ratings:

1. I have absolutely no debts whatsoever and have never had any loans or anything like that as such
2. I dont have and have never had any credit cards/ store cards/ accounts at all.

From a credit rating perspective (say if i wanted to get a mortgage in the near future)- I would assume this would be a negative thing? as I have nothing to prove that I am capable or shall I say committed to pay off my debts on a regular/ monthly basis?

Now does this mean it is better for me to start using a credit card ASAP???

Thanks
Minky

leftieM

If you are registered to vote it certainly helps all things credit-related.

noyk

From what i know and have heard it would be a good idea - i.e. the more good entries in your file the better. Just apply for and get a CC and don't use it maybe. Hopefully someone else can help some more.

Mrs_pbradley936

When you look at your file from Experian it says what accounts you have and how you have managed them over the past. (I am a member of their site so mine might look a bit different to the £2 report you can get). Basically they list your address and if anyone is financially linked to you, any previous addresses (mine go back about 10 years), whether you are on the electoral register or have and CCJs (County Court Judgements). They list any bank accounts, mortgages, credit cards, mobile phone contract etc. and they have circles with numbers in beside each account. If the circle is green and has a 0 it means the account is fully paid up, if it is green and has a 1, 2,or 3 it means the account is 1, 2, or 3 months in arrears. Then the colour of the circles change and the numbers go up according to how much you are in arrears.

I am told that no credit history is as bad for you as having a bad one, so if I was thinking of taking out a mortgage soon I would apply for a credit card one month and a mobile phone on contract a bit later and keep them both up to date.

JennyW_2

pbradley936 wrote:

I am told that no credit history is as bad for you as having a bad one, so if I was thinking of taking out a mortgage soon I would apply for a credit card one month and a mobile phone on contract a bit later and keep them both up to date.

I agree. My brother was refused credit because he didn't have any credit - has always bought things with cash. It can go against you.

Debt_Free_Chick

Minky2Slice wrote:

From a credit rating perspective (say if i wanted to get a mortgage in the near future)- I would assume this would be a negative thing?

The absence of a credit rating doesn't seem to matter, for a mortgage. A bad credit rating would affect your mortgage prospects, but "no credit rating at all" seems to have no affect, probably because it's a secured loan, backed up by bricks & mortar.

Just to build up a rating, you could try for a credit card - you don't need to run up debt, simply buy one thing a month with it, where you were going to use cash, and then pay it all off at the end of the month. If you have a card with online facilities, you could even transfer the money straight away!

You might find it more difficult to get a CC though, so try your own bank first.

mr.broderick

Mortgages are usually based on affordability, it is true that never having credit can reduce your credit score, lenders like to see that you have had credit and have handled it correctly, 12 months history is good. However if you apply for a mortgage it is different than applying for a credit card for example. A good mortgage lender will look deeper in to your file, ie work history,bank history,electoral roll etc your credit score from experian/equifax will just be part of the overall lenders score system and hence will not be the only factor used in the decision. If common sense prevails and someone applies for a mortgage with long electoral history,work history,bank history good regular income far outweighing outgoings then that to me would be a good risk, however im not a mortgage lender and we all know that sometimes common sense doesnt come in to it. Anybody here got any more advice?

Locky

I have no debts, no credit cards, store cards, student loan, etc. but have lived at the same house for years (apart from renting for the last two) and have been on the electoral register there.

My other half has a student loan and one store card but no other debts or credit cards. We both have PAYG phones too.

We have just applied for a mortgage with C&G and heard today that our credit check was successful, so I don't think it's a major problem. We hadn't considered that it might be either! We have got a pretty good deposit so I assume that helped.

mr.broderick

Locky wrote:

I have no debts, no credit cards, store cards, student loan, etc. but have lived at the same house for years (apart from renting for the last two) and have been on the electoral register there.

My other half has a student loan and one store card but no other debts or credit cards. We both have PAYG phones too.

We have just applied for a mortgage with C&G and heard today that our credit check was successful, so I don't think it's a major problem. We hadn't considered that it might be either! We have got a pretty good deposit so I assume that helped.

There you go common sense lender