How to build Credit Rating (First Post!)

Mst

Thrugelmir wrote: »

The longer the history the better. Doesn't improve your score. However is a negative not to be on the register.

Right, thanks for clearing that up!

Ok, perhaps I'll have a look into that. I guess it all helps. But would I be paying a high rate of interest on that though?

phona

I agree that you should get a credit card.

You shouldn't pay a high rate of interest. If you pay your credit card statements in full and on time you don't pay any interest at all. Happily, paying in full and on time is also the best way to build a solid credit history.

The best place to get your first credit card is from your own bank as they have more data about how you manage your current account. Some banks have better CC offers than others; could you tell us who you bank with?
Failing that, you should try one of the "bad credit" lenders - even if you don't have adverse credit history, for lenders no history = bad history since you're unproven.

Definitely get a phone contract in your own name. It'll add a few more OK markers, which is only a good thing.
As for catalogues, I'd say only get one if you actually want to buy something from them. They're generally more expensive than other retailers so you can probably get a better deal elsewhere. Maybe if you can't get a CC you could consider a catalogue for the sake of your credit report.
Remember too that some utility/broadband/landline suppliers report to your file too. Paying those on time also helps build a good report.

Finally, once you have a couple of lines of credit, eg a phone contract and a CC, just stick at that and keep paying them on time. If you do that, you'll have no problems. If you miss payments, you'll struggle to get credit in the future. Don't go applying for loads of cards: one or two is enough to show you can handle credit responsibly.

It's actually all pretty simple: get a couple of lines of credit, repay in full and on time (did I mention that already!?) and just wait while your record builds. Hope that helps.

27col

As someone has already said. The interest rate on any card you might have, is irrelevant because we are suggesting that you only buy on the card what you can afford to pay cash for and then pay the card in full at the end of each month.

lee111s

Very.co.uk are doing 10% off your first credit order and it's interest free if you pay it off in 3 monthly installments.

Only know this as my partner is currently building herself credit history and got us a new tumble dryer as ours is kaput!

An interest free on purchases credit card is a no brainer though

Experian_company_representative

Hi MST,

If you haven't already got a copy of your credit report, then this is a good step to take.

Once you've seen what information is (or isn't) on the report you can start taking steps to build your credit history.

We've got more tips on building a credit history here

Kind Regards
Neil

Mst

Thanks for all of your help folks. It's very much appreciated.

I think I shall do as you say - get a credit card (probably with my own bank), definately have a look at Very.co.uk's offer and take out my own phone contract.

Thanks again!

Mst

Guys, having a look at some credit card comparison sites - it all seems incredibly confusing...

Does anybody have any recommendations?

phona

Mst wrote: »

Guys, having a look at some credit card comparison sites - it all seems incredibly confusing...

Does anybody have any recommendations?

What's confusing you? Do you have any specific questions about it?

You'll see offers for balance transfers and introductory interest rates for purchases. Ignore stuff about balance transfers: that's using the new card to pay off an existing one so no use to you since you don't already have a card to pay off.

The introductory rate is often 0% APR for 12 months, or something like that. That just means there isn't any interest for the first year so you can just repay the minimum payment. You probably still want to repay in full and on time so you get into the habit!

I would definitely avoid any cards with an annual fee in your circumstances.

Who do you bank with?

lee111s

Speak to your bank and ask them if they have any 0% on purchases credit card offers that you would be eligible for.

Thrugelmir

Mst wrote: »

Guys, having a look at some credit card comparison sites - it all seems incredibly confusing...

Does anybody have any recommendations?

If you intend repaying the balance every month. Apply for one which gives you cash back, or incentives of some knid, i.e. Tesco's, M&S.