How do you start to build a credit history for an 18 year old

katies_mum

Good morning, I hope you don`t think this is a daft question but trying to think to the future for my daughter and we haven`t got a clue where she should start.

She is 18, in full time education, (does not want to go to Uni), has a Saturday job, Lloyds bank account with a healthy balance (the one you can have until aged 19), a debit card, ISA etc.

Will she have to wait until she is in full-time employment to start building a credit history or is there anything she can start to do now just to help her in the future?

Will be grateful for any advice, many thanks.

Fruit_and_Nut_Case

katies_mum wrote: »

Good morning, I hope you don`t think this is a daft question but trying to think to the future for my daughter and we haven`t got a clue where she should start.

She is 18, in full time education, (does not want to go to Uni), has a Saturday job, Lloyds bank account with a healthy balance (the one you can have until aged 19), a debit card, ISA etc.

Will she have to wait until she is in full-time employment to start building a credit history or is there anything she can start to do now just to help her in the future?

Will be grateful for any advice, many thanks.

1. Invite Katie to open her own account here on the forum

solentsusie

Ensure she is on the electoral roll.

hayward-kennedy

Fruit_and_Nut_Case wrote: »

1. Invite Katie to open her own account here on the forum

Solid advice, to which an 18 year old girl will say "Go away mum, I'm fine!"

Being registered on the electoral roll is a start. I'm sure she has a mobile phone contract? That is a form of credit, so keeping that paid up-to-date will help matters.

People are always told to get a credit card, only use it for one thing (say for petrol), and make sure it's fully paid off at the end of each month. It really depends on the type of person she is though. If you'd given me a credit card at 18 I'd have gotten myself into all sorts of trouble!

katies_mum

Thank you, hadn`t thought about the electoral roll. She has a monthly sim only mobile phone deal with Tesco, that I pay and the account is in my name!! took it out a few years ago (she got a new handset for Xmas which we bought her).

Do you think she would be able to get a credit card? even though she has savings her weekly income is only £50. She is very good with money (always has been from an early age).

solentsusie

Will Tesco allow you to change the mobile phone account into her name? Even if it is SIM only it will still show on her credit file as a credit account and it paid every month on time will show as a positive on her file.

If they won't let you change the account into her name and she wants to keep the phone number you could see if you could transfer the number to an account in her name - even if you are the one still paying the bills!

katies_mum

That`s definitely worth a try, I`ll give Tesco a call, if they can change it she can set up a DD from her bank account and then I can set up a transfer from mine each month to cover the cost.

solentsusie

katies_mum wrote: »

That`s definitely worth a try, I`ll give Tesco a call, if they can change it she can set up a DD from her bank account and then I can set up a transfer from mine each month to cover the cost.

You could do and it might be worth her having it come out of her account so she remembers she has bills to pay - gives her some added responsibility.

But if you don't want to do that you can still pay it out of your account.

Dobbibill

Hi,

Get her on the Electoral Roll first.

When you apply to a mobile company to transfer the contract they normally run a credit check, this might fail if she is not on the ER.
You can then keep it going from your account if you want. My son failed his credit check so until the ER is updated he pays his contract money into my account, we will then change it all over in time.

This teaches them budgeting and will build their credit worthiness in time. Unfortunately it can be destroyed in minutes but does take time to build up an appealing history.

Good luck to you both.

katies_mum

Brilliant thanks Dobbibill, will get Electoral Roll sorted first. Any idea how often the Electoral Roll gets updated?

I appreciate its going to take a good while to build credit worthiness but thought it a good idea to think about it now and do whatever she can which will hopefully help in the future.

izzy65

Sound like my own situation , my daughters phone account is still in my name, she is 22, she applied for one of the easier cards to get that has extortionate apr, but as she pays if off every month it was not a worry, now she gets invites from loads of different cards, like you I wanted to build her credit rating and your daughter will when she eventually gets accepted for a credit card but any credit agreement will help , as suggested the phone or even a store card.