18 years old and curent account

LIZZY71

Hi
My son turned 18 at the end of last year, his back account is one he has held for a number of years with the Halifax and Its just a cash card account, he works full time earns a decent wage he applied for a loan and was turned down and was told to check his credit file with Experian which he did and showed his credit rating was fair. His bank account with the Halifax did not show on his report at all he was told because of the account it is it wont show, tried to upgrade with the Halifax and was told he has no credit history and hence was going round in circles. He needs a car for work and can only get a decent one by getting a loan and to pay his insurance but he cant get a loan because he has no working bank account on his credit file, but cant get one as he has no credit history has anyone got any ideas?

Thrugelmir

LIZZY71 wrote: »

Hi
My son turned 18 at the end of last year, his back account is one he has held for a number of years with the Halifax and Its just a cash card account, he works full time earns a decent wage he applied for a loan

How many months/years in work?

The_Boss

LIZZY71 wrote: »

His bank account with the Halifax did not show on his report at all he was told because of the account it is it wont show

I don't understand why you were told this. The only thing I can think of is that it is due to opening before he was 18.

He should try applying for a basic account with another bank and seeing if he can tack on a credit card in due course. However, it will be quite a while before he can successfully apply for a loan as he will still have very very limited history and the fact that lenders will score against his age and time in employment.

jessie4109

Even though I only have basic bank accounts my co-op cashminder and nationwide cashplus accounts show on my credit report. Would it be worth applying for one of these accounts to build up credit history or try for a new (full) current account with another bank to what he is with now?

rb10

It looks as though his bank account is a child's account. Since it doesn't have any credit facilities, it won't show on his credit report.

I assume that the only things his credit report shows is that he is on the electoral roll and mobile phone contract?

If this is the case, then there simply isn't enough history for him to be given a loan. Banks like to be able to see that you've managed small amounts of credit well before lending large amounts of money.

The important things to do before re-trying for a loan:

- Upgrade the current account to a full (adult) current account, e.g. Halifax's Reward account
- Ensure his mobile phone contract and electoral roll status are both showing on the credit report
- Wait for at least six months before re-applying

If he can trust himself with a credit card (low limit of say £500), then getting this (and paying it off in full every month) may also help when he does come to apply for the loan.

If he needs the car sooner than this then he'd better get saving!

The_Boss

rb10 wrote: »

If he needs the car sooner than this then he'd better get saving!

Credit is certainly not a divine right and him having to save for it would be a positive life lesson rather than him getting used to being able to have whatever he wants whenever he wants.

matttye

LIZZY71 wrote: »

He needs a car for work and can only get a decent one by getting a loan and to pay his insurance but he cant get a loan because he has no working bank account on his credit file, but cant get one as he has no credit history has anyone got any ideas?

He can get a decent one by saving. People sell cars for a whole variety of reasons and you can pick up a decent used car for £1500 (or less).

Insurance will be expensive at his age, but if he's earning a decent wage he shouldn't have too much of a problem if he pays monthly.

The_Boss

matttye wrote: »

He can get a decent one by saving. People sell cars for a whole variety of reasons and you can pick up a decent used car for £1500 (or less).

Insurance will be expensive at his age, but if he's earning a decent wage he shouldn't have too much of a problem if he pays monthly.

My first car was a Peugeot 105 with 16k miles on the clock that cost me £1,500. The engine was less than 1000cc so lowish insurance too (£800 when I was 22, although will obviously be more thesedays and for an 18 year old).

I guess the problem may be that a young 'un may be more interested in something to look cool in

matttye

The_Boss wrote: »

My first car was a Peugeot 105 with 16k miles on the clock that cost me £1,500. The engine was less than 1000cc so lowish insurance too (£800 when I was 22, although will obviously be more thesedays and for an 18 year old).

I guess the problem may be that a young 'un may be more interested in something to look cool in

That's the problem, people are too keen to get a fancy new car that they don't anticipate having to hand it back/sell it once they've paid off half the finance/loan because they've lost their job and can't afford the repayments any longer. As long as it moves and it's safe to drive, that's fine by me!

My first car was a Peugeot 106 with 100k+ miles on the clock for £900 and that cost me £140 a month to insure Then the clutch went on that and I didn't want to spend too much on it, so I bought a 2002 Ford KA with 40k miles on the clock for £1,500 and that's only £500 for the year to insure, much better It's been a dream to drive too, no problems with it.

dktreesea

What kind of work does your son do? If he has a permanent full time job, he could just approach another bank, say he is looking to move his banking to them, and see what they offer him. I would try a bank like HSBC. They usually offer a package depending on how much business he would be putting their way, so his full salary, for starters. They may offer him a credit card plus a free overdraft facility (both of which he should accept, regardless of whether he wants to use them). If the credit card is , say, £1,200, that, coupled with some savings and part of the overdraft might be enough to get him a car and get it insured.

rb10

dktreesea wrote: »

What kind of work does your son do? If he has a permanent full time job, he could just approach another bank, say he is looking to move his banking to them, and see what they offer him. I would try a bank like HSBC. They usually offer a package depending on how much business he would be putting their way, so his full salary, for starters. They may offer him a credit card plus a free overdraft facility (both of which he should accept, regardless of whether he wants to use them). If the credit card is , say, £1,200, that, coupled with some savings and part of the overdraft might be enough to get him a car and get it insured.

Sorry, but I'm going to have to disagree with most of your post!

• Saying that you are going to move your banking to a new bank rarely (if ever) will give extra points in the application process for a new product.
• It won't be a case of 'seeing what they offer him'. He would have to apply individually for each product that he wants.
• If you're going to try elsewhere, HSBC probably isn't the best place to try. Their customer base is skewed slightly towards the high net worth (i.e. wealthy!) customer. It could be that they'd give an 18-year-old with little/no credit history an unsecured loan, but would be out of character.
• Free overdrafts are nearly always only available to students. I doubt the OP's son would be given one.
• He's unlikely to get a £1200 credit card limit. From Halifax (as he has an existing relationship) or a sub-prime lender, he may get £500. From the other high street banks, he'd be lucky to get anything at all (as he has no credit history).