Is an empty credit report seen as a negative credit report?

Matty36

From what I understand, credit files go back 6 years. I have a friend who lives with her parents, no bills, no credit card, hasn't applied for anything in years etc (I dont know why) so has nothing on her report.

If she does apply for anything, is it generally seen as a negative? Or is it just like a neutral thing and she would be ok?

Candyapple

It would be seen as a negative as any lender would have no record that she has the ability to repay credit/past history of how she has used credit. She would likely only be eligible for subprime credit cards such as Capital One/Aqua etc.

Does she not even have a bank account? Mobile phone contract? Those are reported to the CRAs monthly.

[Deleted User]

Candyapple wrote: »

It would be seen as a negative as any lender would have no record that she has the ability to repay credit/past history of how she has used credit. She would likely only be eligible for subprime credit cards such as Capital One/Aqua etc.

Does she not even have a bank account? Mobile phone contract? Those are reported to the CRAs monthly.

Would a current account actually help here? They would only show an overdraft and are really only on credit reports for financial surveillance purposes.

Matty36

Yeah she has a bank account (same bank for about 10 years i think) but when she uses that free credit report service, (noddle i think its called and i forget the name of the other one) it cant find her or says something like she doesnt have enough details to populate a report, so its likely empty?

And no, shes on pay as you go

macman

Is she registered for any of the utilities: gas, water, electricity, landline, broadband, TV?
If not then she should apply to her own bank for a CC (the credit limit is unimportant) and then use the card regularly and pay it off in full each month, to build her credit history.
Lenders want to see a record of credit being taken and repaid on time.

Candyapple

johnsmith1890 wrote: »

Would a current account actually help here? They would only show an overdraft and are really only on credit reports for financial surveillance purposes.

Yes as if the bank account has been held for a long time, it shows account history/longevity. Even if you don't have an overdraft, having a bank account on your file is always good.

The free versions to check your credit files are below:
Experian: https://www.moneysavingexpert.com/creditclub
Equifax: https://www.clearscore.com
Call Credit: https://www.noddle.co.uk

Your friend needs to check all 3 to see what they show. Her bank account may not be reported to Call Credit/Noddle as not all lenders report to all 3, hence why you need to obtain reports from all of them to get the true picture.

If she wants to apply for any sort of credit in the future, she’d do well to perhaps approach her bank first to see if she can get a credit card with them, seeing as they’ll have a history of how she runs her bank account. If they say no, she should look at Capital One, Aqua etc and apply for one of those, used the card for her daily spends and make sure she has a direct debit set to clear the balance every month. After she has had the card for a year, she can apply for a more mainstream card. Having good credit is always useful to have, however many people don’t realise it takes time to build up your credit history and be seen as a good prospect to potential lenders.

Dobbibill

Is she on the ER?
That with a current account will give her a file, albeit a thin one.
What lenders look at in a file is evidence of handling credit responsibly. No history is as bad as bad history as they have no evidence to base their risk on.

Advise her to follow the links provided above and check all 3.