Phd student - credit rating & card/income/stipend

designer93

I’m a 26 year old PhD student. I’m a few years away from hopeful completion of my course and I'm looking to build up my credit score in preparation for getting a mortgage once I am working again. I worked previously for 4-5 years and I am really regretting not getting a credit card earlier back then….

I’ve got a 20k deposit which I am looking at turning into 30k by the time I finish my PhD. I have a help to buy ISA with the maximum 12k in it for the hopeful bonus. My partner aims to have 20k. So savings wise we are seriously fortunate to be faced with having an actual 50k deposit which is absolutely amazing. If I ever get a job is another issue altogether lol….. (or good credit)

I’m not struggling for money – yay!

I’ve got more than enough savings to get a mortgage – double yay!

Hopefully I will get a decent job although absolutely no guarantee…. but sort of yay!

So that’s great and fine.

So then, the other week I tried to get a student account with Nationwide for the perk of a small overdraft and keeping all savings set aside. I got rejected….. oh lawd…. so the panic set in. What’s going on here? I looked into my credit score and bam…. it’s ‘fair’ so not actually even ‘good’.

I believe the following things have made my credit not so good:

• I’ve never had a credit card
• I’ve only ever had ‘credit’ for mobile phone contracts, I have 1 no. right now.
• A few years ago I switched my main account from Santander to Nationwide (for that stupid £100 thing) and closed my other Santander accounts (which I’d had open since 1998)…. unknowing to the fact that having bank accounts open for 6+ years is good for your credit rating – my oldest bank accounts are 2 years now. Woops.
• I’ve bounced around addresses so my electoral roll is all over the place, my last address have been:
  1. Current address (7 months ongoing)
  2. Last address 1 (1 month)
  3. Last address 2 (12 months)
  4. Last address 3 (6 months)
  5. Last address 4 (6 months)
  6. Last address 5 (2 years 3 months)
• At the start of this year I renewed my phone contract (so a new one) and also opened a new bank account with Nationwide.

This has all come to light recently and I think I am beginning to understand things…. I think. So from what I gather I should be doing the following for my credit rating....

• Get a credit card – buy my shopping and petrol on it every week at Asda and pay it off straight away.
• Make sure I have been living at an address for at least 2 years minimum before I apply for a mortgage
• I have asked my landlord to participate in the below scheme so that paying my rent on time leads to a better credit which looks promising. ('Experian rental exchange'.
• My bank accounts will all be a few years older minimum by the time I come to do it which will help?

Do you think the above list is what I should be doing?

After being rejected for the student account I looked into getting a credit card to build my credit and this is something I am unsure about whether or not I will struggle.

I get a ‘stipend’ (‘studentship’/’maintenance grant’) paid monthly, which is £14,777 total per year. In my contract it states “HM Revenue and Customs has determined that payment of the maintenance grant is not regarded as income for income tax purposes”. I am unsure as to whether this means:

a. The money counts as an income but for income tax purposes the tax is not charged
b. The money is not classes as an income

What do you guys think about that? I am not confused about the ‘non-taxable’ component - I am confused about its status as an ‘income’. I’ve had a good search for online advice but can’t see much at all. I saw an advisor at the university and they couldn’t advise because its ‘personal’ finance. I am unsure as to whether I should just search for a credit card with this as an ‘income’ and get in touch with the provider to see what they say before submitting an application? Surely getting over £1200 a month in the bank would do something?

Hopefully this will help others in my position, it seems to be a grey area.

Thanks so much for anybody who can help. Any comments big or small seriously appreciated.

Thanks

[Deleted User]

designer93 wrote: »

I looked into my credit score and bam…. it’s ‘fair’ so not actually even ‘good’.

For a start, you're looking at the wrong thing. The comedy scores aren't important.

You need to check the data on all three of your files - not just Experian.

Check what's there - and whether it's accurate. Anything that isn't, get it corrected. That's one side of the coin.

The other is employment and income. Student status and a stipend will not be seen as favorably as regular employment and a salary by many lenders.

You're right to look at getting a credit card to build some credit history. Try a sub prime lender - eg aqua or Vanquis.

Ben8282

designer93 wrote: »

and closed my other Santander accounts (which I’d had open since 1998)….

Accounts which you opened when you were age 5 and closed a few years ago would not have an overdraft facility and would therefore not be being reported to CRAs or appear on your credit files.
Your stipend is your income. You just don't have to pay tax on it (lucky you!).

Voyager2002

Your chances of getting a mortgage when the time comes, and getting some kind of credit card now, are actually pretty good. The length of time that you held your bank accounts is unlikely to make any difference: your rejection from Nationwide was probably because you are already a customer and have already had that hundred pound bonus. The most important fact is that you have apparently never failed to pay a debt (or made a late payment).


Things that would help: staying at the same address for as long as possible and ensuring that you are on the electoral roll. Using credit and always making the payments on time. And that silly scheme with your landlord is unlikely to make the slightest difference, so do not bother with it if there are any fees involved.


As already posted, when applying for a credit card put down the amount of your stipend as your income. I suggest that you do not bother contacting the lenders for clarification, since they are highly unlikely to know what it is.