advice on improving credit ratings

bibliboo · 28 May 2012 at 11:56PM

In january i went to buy my 1st monthly contract phone (at £20 a month) from Tesco, having no experiance of credit or borrowing and not having a clue what a credit check was. After taking my details I was told that I failed my credit check and should contact Equifax:eek:. I was very shocked because I can definately afford £20 a month! however I have since looked up the complicated world of credit checks and realised that having no borrowing history is bad as not paying a debt off, hence the rejection, which results in having a worse credit score.
Any advice on how to get on the credit score ladder would be appreciated as I would like to be able to apply for a mortgage when I am older.

CLAPTON · 28 May 2012 at 11:59PM

you have forgottten to tell us

-your age
-you employment
-your income
-on the electoral roll
-what exactly your credit files say
-your bank a/c

[Deleted User] · 29 May 2012 at 12:00AM

see if you can get a sub prime(i.e high apr)credit card,use it every month and pay it off in full each month to avoid interest 6 months down the line one improved credit file

bibliboo · 29 May 2012 at 12:01AM

p.s. I have since bought the same phone by cash and was advised by a friend to go into a cheaper 'sim only' contract, which can also improve the score. Am I likely to be recjected for this as a result of the previous rejection aswell? Or should I go for it without worrying? Or is it a load of rubbish?

bibliboo · 29 May 2012 at 12:08AM

CLAPTON wrote: »

you have forgottten to tell us

-your age
-you employment
-your income
-on the electoral roll
-what exactly your credit files say
-your bank a/c

I'm 23, live with my parents, on the electoral roll since I was 18, employed, my income is £1000 a month and have been with the same bank since leaving school. Not sure what my credit files say or how to check.

CLAPTON · 29 May 2012 at 12:15AM

bibliboo wrote: »

I'm 23, live with my parents, on the electoral roll since I was 18, employed, my income is £1000 a month and have been with the same bank since leaving school. Not sure what my credit files say or how to check.

your best bet is to get a credit card;

probably the best start is your own bank

get a card; use it for things you anyway buy (maybe petrol, groceries) and always pay in full each month

that will improve your credit rating and cost you no interest

there are three credit agencies
there is a statutory report they must provide for £2 and there are 'free' monthly trials too (ok as long as you cnacel within a month)

bibliboo · 29 May 2012 at 10:24PM

CLAPTON wrote: »

your best bet is to get a credit card;

probably the best start is your own bank

get a card; use it for things you anyway buy (maybe petrol, groceries) and
always pay in full each month

that will improve your credit rating and cost you no interest

there are three credit agencies

there is a statutory report they must provide for £2 and there are 'free'
monthly trials too (ok as long as you cnacel within a month)[/

Thanks. Should I be worried about being rejected for a credit card, or should I just go for it.
Because I did a 'soft credit check' on money super market.com which doesn't affect the score and it said that my best chance would only be 5/10 for for sainsbury's credit card.

Maestro. · 29 May 2012 at 10:31PM

Try your own bank (current account) first - someone who knows a bit of your history. Don't apply online, phone or go in branch.

bibliboo · 29 May 2012 at 10:59PM

Am I likely to be rejected for a 'sim only' contract and would it improve the credit score at all?

Maestro. · 29 May 2012 at 11:12PM

I can't really say, as I don't issue phone contracts :P

They can't be that hard to get though, my phone company offered me that as a backup just in case the phone contract fell through as I told them I had little in the way of credit history. They also said that after 3 months they'd let you upgrade to a phone, company is Orange btw.

But I got accepted for a £36 per month phone and only had a CC one month, maybe having an OD with my current account helped.

To answer your question if you get a phone contract it will help improve credit history as its a form of credit you are paying off, a bit like a loan. Its also a very easy way to build credit, set up a DD and forget about it.