Information on credit

dreadhabib

I'm 21, with no debts and have never taken out any form of loan etc... I assume, I will therefore have a zero credit rating - as I've never had credit of any kind.

Is a zero credit rating a negative when it comes to looking at borrowing money such as a small loan - as there is no proof to lenders of your reliability or previous experience at meeting financial and repayment commitments?

In this respect, is it potentially sensible for me to find an appropriate credit card and use it occasionally - meeting payments of course, to start showing my ability to meet repayments and handle credit effectively - thus gaining a credit rating?

Many thanks for reading.

TrueUnitedFan

Hi there, whilst you don't have a credit history, you may find that you 'MIGHT' get accepted for a small loan from a main street lender, most likely your bank, the longer you have been with your bank, the most trust rating/history you build up with their internal credit scoring systems.

Then other factors may hinder your chances of getting a loan. Not being on the electroll roll at current address, how long you have worked for your current employer. If your working/ how much your earning ect. All these comes into consideration. I think these days of getting credit easily though is long gone, your age will help you better though, compared to someone in the same position as you (no credit history) and their 18, (example)

wnoktnwbr

Yes, take out a credit card and spend on it and pay it back on time every month. A credit rating is to show that you can manage money, having a credit card that is managed well is worth a lot more than no credit history.

As a side note, don't fall into the trap of taking out short term loans to try and boost your credit score, it will bite you in the butt.