Whats the best way to improve my 19 year old son credit rating.

nathan97

Hi guys. My 20 year old son is an avid saver and has saved about £2500 toward the cost of a deposit for a 15 plate car that costs about £15000. He needs to improve his credit rating. He has no debt, but has a mobile phone contract, gym membership and he is on the electoral register and eligible to vote. All of which (I think ) contribute to a positive credit score. He wants to get a lower rate personal loan from the bank, rather than higher rated vehicle finance available from the showroom where the car is for sale. He has not approached the bank for a personal loan yet as he is aware that a refusal will drop his score. He is also apprehensive about getting a credit card which would boost his score. Any tips please for what he could do.

Many thanks in anticipation of your help.

Kind Regards

Nathan97

[Deleted User]

A credit card is the easiest and cheapest way to build a good credit history. He needs to use it and clear it in full each month.


Remember you're not building a credit score - that will fluctuate and only serve to depress him if he tries to use it as a gauge. It's all about demonstrating a pattern of good credit management.


His own bank or a sub prime card would be a good place to start.

nathan97

Thank you for the advice.It was really helpful. Love the username by the way, I had a zx81 when I was 12 lol. First ever computer, still up in the loft. Cheers again

GDB2222

nathan97 wrote: »

Thank you for the advice.It was really helpful. Love the username by the way, I had a zx81 when I was 12 lol. First ever computer, still up in the loft. Cheers again

Worth more now than when you bought it!

Ben8282

Did your son have a birthday between writing the title and first line of this post?
You are not going to like what I am going to say.
Your son intends to apply for a loan of at least £12,500.
His credit history is limited to a mobile phone contract and payment of a gym membership. You make no mention of the existence of a current account being reported.
It is highly likely that both of these accounts are showing a balance. Such balances are debt, whether you consider them as such or not. If, for example, the mobile phone contract is a 24 month contract for an expensive phone, the remaining amount due under the contract for the subsidised phone will be showing as a balance. Same for the gym membership. If it is being reported to CRA's then it is one of those loan type memberships where the gym is paid the contract term and he signs a credit agreement for the fees for the entire contract period. This will be showing as a balance and is debt. While the regular payments are positive, the existence of any large balances will be negative.

I believe the chance of your son actually getting a £12,500 loan to be poor and his chances of getting one at the headline rate just about nil.
He lacks a sufficiently long and diverse credit history. Simply because of his age, he lacks length of employment, employment stability, adult residential stability, time on electoral roll, any history of repaying bank loans and credit cards, has a very low average credit account age and so on.
Getting a credit card would, in the long term, improve his overall credit worthiness if the account is properly maintained, but will do absolutely nothing to improve his chances of getting this loan in the short term. Similarly, getting some sort of overdraft facility on his current account (but not using it) so that the current account will be reported would also be of benefit.
Then there is the question of income. Does your son have sufficient income to support this loan?

GDB2222

Out of interest, has your son checked out the cost of car insurance, Nathan? He's under 25, with a car that's presumably £20k plus when new. That could cost a small fortune to insure.