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

dgtazzman

Just hang in there, there's a silver lining to the cloud. I came to the UK from the Netherlands 4 years ago and I faced much the same difficulties as I've been reading here at first. Nice little circles as 'You need a UK bank account to rent a place, but you need an UK address to open said bank account'.

Our household income is above average, but most of the banks we initially approached weren't interested or couldn't offer the product we needed. Luckily we found one that was willing to help (Lloyds). They were happy to give us a full current account, based on our income.

Got some phone contracts and credit builder credit cards after around 6 months (indeed with silly low limits of 200 pounds). Ran those well for a year, at which point they increased the CC limit to a more workable amount. 6 months later I qualified for a Cap One Progress card and pretty much as soon as we'd been in the UK for 3 years, we started receiving letters from prime credit card providers and we qualified for these.

3 years seems to be the magic number for most credit, after that you pretty much are treated the same as a UK citizen (at least if you're an EU citizen).

Now, at year 4, we're in the progress of getting a mortgage and have received the DIP and passed the credit checks.

I must say my wife is a UK citizen, but she lived with me in Holland for a year before we both moved to the UK.

blon

@dgtazzman: Thanks for joining the discussion and sharing your story, that's exactly the type of exchange this thread was meant to be about.

I'm content with the Aqua reward card I got after about 3-4 months of being in the UK and the Capital One card I got now. I had no issues opening a basic account stripped of any features the first day we arrived with Santander nor renting a place immediately afterwards, though. However, after one full year, I'm looking for a proper bank account now. I got myself a bank reference from my old bank, so I will attack a bank branch in an affluent area as somebody suggested here and if necessary ask to speak to the manager to obtain a Bank account with overdraft (though I don't need it per se, but for building credit it seems to be important).

jen_br

yup I came from Canada Halifax helped me out then lloyds they gave me 15k CC within 4 months.

dgtazzman

Yep, the Lloyds banking group (Lloyds, Halifax/BOS) seem to be very tolerant of foreign nationals. Think it was after a year or just under they qualified me for an overdraft (only 100 pounds at my own request mind you, only wanted it to show I handle my financial affairs well).

We now hold a gold account with them and we had a meeting with them a while back as my wife had some tax money back and they wanted to convince her to put it in an ISA. They were raving what perfect customers we were and we fall in their highest category of creditworthiness etc., found it all quite flattering

blon

jen_br wrote: »

yup I came from Canada Halifax helped me out then lloyds they gave me 15k CC within 4 months.

15k CC within 4 months of arriving in the UK, with no banking ties to a UK bank (for example through banking with a bank of the same group in your home country and being "transferred" over to the UK subsidiary) whatsoever is quite astonishing. When was it? Did you have anything special in your favour (like million GBP salary)?

Maestro.

blon wrote: »

@dgtazzman: Thanks for joining the discussion and sharing your story, that's exactly the type of exchange this thread was meant to be about.

I'm content with the Aqua reward card I got after about 3-4 months of being in the UK and the Capital One card I got now. I had no issues opening a basic account stripped of any features the first day we arrived with Santander nor renting a place immediately afterwards, though. However, after one full year, I'm looking for a proper bank account now. I got myself a bank reference from my old bank, so I will attack a bank branch in an affluent area as somebody suggested here and if necessary ask to speak to the manager to obtain a Bank account with overdraft (though I don't need it per se, but for building credit it seems to be important).

Having an overdraft and using it sensibly did sod all for my credit rating. My own bank, who the overdraft was with, wouldnt even give me a credit card (still got a chip on my shoulder about that tbh, minimum credit limit is £500 which even Brian Griffin could afford!) so I ended up having to go the vanquis route.

[Deleted User]

blon wrote: »

@dgtazzman: Thanks for joining the discussion and sharing your story, that's exactly the type of exchange this thread was meant to be about.

However, after one full year, I'm looking for a proper bank account now. I got myself a bank reference from my old bank, so I will attack a bank branch in an affluent area as somebody suggested here and if necessary ask to speak to the manager to obtain a Bank account with overdraft (though I don't need it per se, but for building credit it seems to be important).

Asking to speak to a manager will do nothing.

If anything, pushing them to try and give you what you want is liable to backfire. It has little to do with your earnings and has been repeatedly said, everything to do with your financial history.

One year MAY give you more evidence towards getting a better account, but pushing for more credit will be construed as highly suspicious by a bank.

You will probably be able to get a 'normal' account now with no limits but as for anyone, don't try opening a 'normal' account, CC's etc quickly as regardless of who you are, your get rejected.

blon

One week after getting my Capital One credit card, I have further good news from the credit application front:

Santander directly approved me for a 1-2-3 account without any appeal necessary! As suggested here

litheplay wrote: »

Again I would go to Barclays or HSBC - look for a big branch in an affluent area (I went to the Sloane Sq one in Chelsea), make an appointment in branch and take your pay slips with you. Don't leave the branch without a regular bank account with overdraft facility, ask to speak with a manager if any issues. You're high income and been already here for one year, I doubt they'll turn you down.

I walked up to a branch in the city centre. I have not applied for overdraft yet to be on the safe side, but my advisor told me that the 1-2-3 is a great stepping stone for any of their products and that I should be eligible for a good overdraft and a CC within a few months. One important tip I got was that if I transfer some savings to Santander this would greatly improve my credit perspective. I had planned to do this anyway because of the 3% on up to 20K you get with the 1-2-3 - you nowhere get as much in the market. I'll probably move 15-20K on that account to maximise the interest. This and the cashback were my main drivers in choosing Santander as my bank.

After one year of patience and proper conduct I was really eager to get that upgrade, and if Santander had rejected me, I would have gone to Halifax which seem to be nicer to foreigners as some have reported:

dgtazzman wrote: »

Yep, the Lloyds banking group (Lloyds, Halifax/BOS) seem to be very tolerant of foreign nationals.

Regarding some advice received here like

izools wrote: »

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.

as well as

newbieboy wrote: »

Asking to speak to a manager will do nothing.

If anything, pushing them to try and give you what you want is liable to backfire. It has little to do with your earnings and has been repeatedly said, everything to do with your financial history.

One year MAY give you more evidence towards getting a better account, but pushing for more credit will be construed as highly suspicious by a bank.

You will probably be able to get a 'normal' account now with no limits but as for anyone, don't try opening a 'normal' account, CC's etc quickly as regardless of who you are, your get rejected.

I am happy that I was wise enough to disregard it as it would have cost me money (in terms of missed interest and cashback) and held back the development of my credit history as, in my opinion, better products give you the better means to improve your credit score.

Also, I am now even more convinced than before that contrary to what some claim here it is NOT just your credit history that matters, which reflect your behaviour, but also forward-looking measures like high/above-average earnings plus a substantial stock of savings.

If I had to do it all over again, I would have opened a HSBC passport account and/or an American Express card in my home country (as others did in this thread) to receive better treatment in the UK right from the start.

As for the others who are in similar situation to mine, be persistent and prepared to face rejection, and if you get rejected, appeal the decision by providing supplemental information like proofs of income, a bank reference from your home country (had one but did not need it in the end), etc., don't lose heart and continue applying, while spreading out your applications over time. However, the importance of the number of credit searches in 6 months' time seems to be exaggerated by some, in my case I had about 3-4 searches so far in 2013 and they were of no harm.

To sum it up, this is the current state of my credit situation:
To sum it up, this is my U.K. banking history so far:

1. Sep 2012: Moved to U.K., started job immediately, opened Santander basic account with no debit, overdraft and balance cap of GBP 10K. Account is joint with partner. Household income is in the low 6-digits (both PAYE full-time employees).
2. Oct 2012: Got on electoral roll
3. Dec 2012: Got Aqua Reward Card with GBP 250 credit limit and 49.9% APR.
4. March 2013: Santander local branch thought they could upgrade me to 1-2-3 account after 6 months but got rejected by their computer. They suggested to re-try after a full year.
4. May 2013: Joined Experian Credit report for 2 months, no wrong entries, score fluctuates between 760 and 820 depending on utilization ratio.
5. July 2013: Asked Aqua for credit limit increase, declined. (I assume no credit search was carried out then).
6. August 2013: Got rejected for Capital One Classic Extra cashback card. Given reason: too low credit score. I appealed the rejection immediately with additional information and was accepted shortly after.
7. September 2013: Went to Santander to ask for an account upgrade after one full year of loyalty from the basic account and was granted the 1-2-3 account I had been looking for ever since. No overdraft yet, though, but plan to get some after 3-6 months and perhaps a Santander credit card.

Coraline

I found NatWest to be incredibly easy. I opened a current account and savings account with them about 3 weeks after I moved here, then got a credit card (now 2) as soon as I became employed.

The building society was not helpful, their policy was you had to be living here for at least a year before they'll consider you. I don't know if that's the norm.

Kt13

izools wrote: »

Vanquis provide credit to anyone who has a pulse if they really are desperate, so no need for a secured card, but the OP already has a better line of credit than Vanquis offer, from Aqua.

Not totally true..

I've got a pulse and I got rejected for a Vanquis card. I don't need it now anyway, and have gone about settling my (current 8k) debt. Had a gap in my records housing wise, and got rejected. So they must have some kind of credit scoring.