The struggles in obtaining credit when you are new to the U.K.

izools

To blon and xkpa.

One word of advice.

Do absolutely nothing whatsoever accounts wise for six months.

No new accounts.
No closing old accounts.
No applications for any credit scored products.

Just don't touch any of it for a minimum of six months.

Re-approach Capital One and Vanquis after at least six months has lapsed.

Then come back and I'll say "you're welcome" :beer:

blon

izools wrote: »

To blon and xkpa.

One word of advice.

Do absolutely nothing whatsoever accounts wise for six months.

No new accounts.
No closing old accounts.
No applications for any credit scored products.

Just don't touch any of it for a minimum of six months.

Re-approach Capital One and Vanquis after at least six months has lapsed.

Then come back and I'll say "you're welcome" :beer:

What makes you so sure it will work out after another 6 months? I might just get rejected again because my credit score might not improve much with only Aqua Card on my credit file (with hideous APR, ridiculously low limit). And then why not rather approach a better bank like Barclay's for a current account with overdraft and a Barclaycard Initial?

xkpa

Thanks izools, i didn't even thought about trying another credit card application. After 6 months I will turn 30, and I heard that the age factor will be green for me because of that. What do you think, should I try Barclaycard again or to concentrate on CapitalOne or Vanquish?

Btw does it matters that I am self-emploed and not employed?

Cheers

izools

There is a simple overrulling rule when it comes to credit scoring (in the UK at least):

Stability.

Credit score is greatly affected by the presence of new accounts, by the presence of accounts that have been opened and then closed after a relatively short timeframe (under 12 months), and the presence of more than one or two credit searches in the last six months.

It is also affected by how long you've been with your bank, how long you've been with your employer, and how long you've been at your current address.

The older your newest account, and the older your oldest account, along with the fewer credit searches you've had in the last six months, and the longer you've been at your current address, with your current bank and employer, the more likely you are to get credit.

People often make the mistake of thinking that collecting a lot of accounts will build their creditworthiness more quickly but in actuality it has the opposite effect - UK credit scoring models and underwriters don't want to see any signs of instability.

They want to give accounts to those who have a proven ability to maintain the status quo.

I'd like to say I speak from experience as within six years of being discharged from bankruptcy I've got myself bank into a position where this year I have been approved for an Amex Platium, Barclaycard Platinum with £10,000 limit, and £15,000 bank loan at 5.9% APR.

blon

izools wrote: »

There is a simple overrulling rule when it comes to credit scoring (in the UK at least):

Stability.

Credit score is greatly affected by the presence of new accounts, by the presence of accounts that have been opened and then closed after a relatively short timeframe (under 12 months), and the presence of more than one or two credit searches in the last six months.

It is also affected by how long you've been with your bank, how long you've been with your employer, and how long you've been at your current address.

The older your newest account, and the older your oldest account, along with the fewer credit searches you've had in the last six months, and the longer you've been at your current address, with your current bank and employer, the more likely you are to get credit.

People often make the mistake of thinking that collecting a lot of accounts will build their creditworthiness more quickly but in actuality it has the opposite effect - UK credit scoring models and underwriters don't want to see any signs of instability.

They want to give accounts to those who have a proven ability to maintain the status quo.

I'd like to say I speak from experience as within six years of being discharged from bankruptcy I've got myself bank into a position where this year I have been approved for an Amex Platium, Barclaycard Platinum with £10,000 limit, and £15,000 bank loan at 5.9% APR.

You mention stability in one's accounts. However, my basic bank account does not even show up on my credit report as it has no overdraft, hence I cannot I can prove any stability in this respect. The only credit product that shows up is the Aqua Card. Therefore I am looking to get a proper bank account as some here have advised.

Also, the reports by some in this thread who obtained good accounts on the fast track underlines that stability per se is not the only aspect that matters. Apparently it's who you start banking with.

manami_mnm

blon wrote: »

You mention stability in one's accounts. However, my basic bank account does not even show up on my credit report as it has no overdraft, hence I cannot I can prove any stability in this respect. The only credit product that shows up is the Aqua Card. Therefore I am looking to get a proper bank account as some here have advised.

Also, the reports by some in this thread who obtained good accounts on the fast track underlines that stability per se is not the only aspect that matters. Apparently it's who you start banking with.

Which bank do you hold your basic current account with?

izools

blon wrote: »

Apparently it's who you start banking with.

Given that third party lenders don't see who your accounts are with I don't see how but I get your point about basic account not appearing on your credit file.

Strange considering the Barclays and Co-Operative basic accounts both appear on a credit file as full accounts.

But remember - as I've pointed out - the contents of your credit file, whist very important, aren't the only defining factor.

Simply being able to say on an application for a credit card that you've been with your bank and employer and lived at your address for longer will help improve your chances of being approved, as will your Aqua card being older.

Opening new accounts will introduce an element of instability and temporarily reduce your creditworthiness.

blon

izools wrote: »

Given that third party lenders don't see who your accounts are with I don't see how ...

This is because as others have observed a "good", high street bank will rather look at the history of your behaviour with them when it comes to deciding about a limit increase, lower APR, better account/card for you than other institutions that mereley look at the credit score which as you describe yourself takes very long to build up. As far as I understand how credit reports work, these overall better terms are positively reflected in your score and therefore boost your growth/put you on a faster track.

I bank with Santander and it has not helped me.

izools

blon wrote: »

This is because as others have observed a "good", high street bank will rather look at the history of your behaviour with them when it comes to deciding about a limit increase, lower APR, better account/card for you than other institutions that mereley look at the credit score which as you describe yourself takes very long to build up.

I bank with Santander and it has not helped me.

Well I have banked with HSBC for three years; never incurred a penny in charges, and they have never not even once generated any pre-approved offers for me.

You're right about banking with Santander not helping you but that's nothing to do with creditworthiness, rather just because they're an absolute shower.

The only banking group that still generate pre-approved offers are Lloyds Banking Group but their systems are very strange and sporadic - their pre-approved offers seem to bare no resemblance to the creditworthiness of the customers said offers are given to.

Prior to joining HSBC it took TWO YEARS before Lloyds TSB generated pre-approved offers for me. Again, despite running the account flawlessly - good turnover, healthy average balance, no charges / bounced payments, etc.

But hey, I've shared my 2p worth, I know this approach has worked fantastically many times historically, up to you.

You can take a horse to water...

blon

izools wrote: »

But hey, I've shared my 2p worth, I know this approach has worked fantastically many times historically, up to you.

I surely appreciate your views and experience that you contribute to the thread.

Of course, your history is different than the one of people coming to the UK, because you said yourself in an earlier post that you rebuilt your credit after a bankruptcy.

It's as I always say: You can have gone bankrupt in the past (6 years ago) but be in a much better position than somebody new to the UK against whom none such things can be held against. There's no innocence presumption in the credit rating game, rather quite the opposite: "guilty" (bad credit) until proven "innocent" (creditworthy).