Need advice regarding a loan

[Deleted User]

390023 wrote: »

this seems like a good alternative to saving.

In what way? Paying someone to borrow their money seems a terrible alternative to saving.

dealer_wins

The best way to build a credit score is by not borrowing.

Apart from a mortgage it is possible to go through life without ever taking a loan, overdraft or credit card.

It will save you tens of thousands of pounds compared to an average life borrower too!!

spadoosh

Its a bit risky taking on a 5k loan with new free lance work.

You need to prove your income which youll struggle to do and you normally need a few months of contracted wage before youll be looked at. You can get loans with freelance work but you normally require year(s) of proof of income.

Your credit score has no impact. Your credit history does. If you have little/no credit history from never borrowing banks are willing to take the risk if you can show you have regular income and the loan is affordable. I doubt you'd be able to achieve this with a couple of months work. It will also depend on how your work goes. Has the photographer employed you adhoc or are you contracted? Id imagine it would be the former which again makes it difficult to prove income.

£250 is a lot of money to find every month when you might not have money coming in.

Pure speculation on my part but if its for a car, id strongly advise against it.

To 'build' your credit 'score' get a student credit card (around a £500 limit) and buy some food with it every month. Pay it off in full each month and it helps you look like you can manage money. Getting a £5000 loan when you simply can not guarantee work is a quick way to ruining your credit history. Not to mention it looks like it going to cost you £1000 for the privilege of borrowing the money. A very expensive way to do things.

Candyapple

If you are a full-time uni student, then you should quite easily be able to access £5k interest free from the various student accounts that are available which usually lasts until the end of your course + 1 year after.
http://www.moneysavingexpert.com/students/Student-bank-account

However, be aware that it is easy to view this as 'free' money and fall into the debt trap like millions of other students before you and many to come after, who end up stuck in repaying their overdraft cycle many years into their careers and after when uni finished.

Like everyone else, if you are comfortable putting away £350, in 14 months time you would have £5k saved.

Clive_Woody

390023 wrote: »

I'm working with a freelance photographer as well as taking on commissions myself so the work is flexible and doable around my course.

I need to start building a credit score eventually so this seems like a good alternative to saving.

Was the £5k for something specific....that you couldn't save up for?

If this loan is just to build a decent credit history (not a credit score) of repayments then there are much better ways to do this. Get yourself a student credit card and use this occasionally with a DD set up to pay it in full each month.

Pixie5740

dealer_wins wrote: »

The best way to build a credit score is by not borrowing.

Apart from a mortgage it is possible to go through life without ever taking a loan, overdraft or credit card.

It will save you tens of thousands of pounds compared to an average life borrower too!!

That makes no sense. To build up your credit history you need to use credit otherwise you have no history. Lenders are just looking for patterns on how you handle credit, no pattern doesn't equal good it means you're an unknown quantity and can get hit with higher rates than those who show they can handle credit.

The old, never a borrower nor a lender be, isn't necessarily a bad bit of advice though. Then again sometimes it works out cheaper to borrow than to use savings, but not always.