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Discharged 4 years ago. First job in 5 years. When appropriate to apply for credit card?

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Discharged 4 years ago. First job in 5 years. When appropriate to apply for credit card?

edited 23 May at 1:40AM in Bankruptcy & Living With It
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AbleBerryAbleBerry Forumite
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edited 23 May at 1:40AM in Bankruptcy & Living With It
I was discharged from my BR in May 2016. I have been unemployed since early 2015. Starting my first full-time job next week. I am trying to rebuild my credit rating - all of it is up to date and correct, but I (obviously) still have a low score. I have not applied for any credit at all since discharge. I know that applying for a credit card, spending a small amount each month and paying it off immediately is one way to slowly build credit rating but I'm worried about being rejected and searches on my credit file.
  • Taking into account my circumstances, when would be appropriate to apply for a credit card? Should I leave it a few months into employment first?
  • Which credit cards are most likely to accept me given my circumstances? I know to expect a high interest rate and low limits to start with.
Thanks!

Replies

  • mwarbymwarby Forumite
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    I would wait until next year, and apply with whoever you bank with. That way your bankruptcy is gone, and being able to put you’ve been in job for a year will help. 

    I’d be very careful about getting credit too soon not all jobs work out. Credit card companies have been hit by covid so are likely to be more averse at the moment 
  • grantmondo2010grantmondo2010 Forumite
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    mwarby said:
    I would wait until next year, and apply with whoever you bank with. That way your bankruptcy is gone, and being able to put you’ve been in job for a year will help. 

    I’d be very careful about getting credit too soon not all jobs work out. Credit card companies have been hit by covid so are likely to be more averse at the moment 
    I thought it’s not completely gone from your file until 6 year anniversary 
  • sammy32683sammy32683 Forumite
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    Yes so you were discharged May 2015 meaning you were declared bankrupt May 2014. So 6 years after being declared bankrupt is May 2021, this is your 6 month mark. 

    Also I've read people are able to get credit cards almost immediately following discharge. However I imagine they would have been employed as with a low score they will look at your affordability and being employed for 1 month is likely to look bad so as previous user said I would give it a year. You'll have no bankruptcy, have had 12 months of income and may be able to get a good rate card.
  • sammy32683sammy32683 Forumite
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    Sorry discharged May 2016 declared bankrupt 2015 but still 6 years is May 2021. 
  • nickologjamnickologjam Forumite
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    Its never too early to get a credit card to build your credit file. Vanquis and Ocean are pretty accommodating and 4 years post discharge you should easily get accepted even if its a very low limit to start with.
    Use it for regular spending, avoid going over 25% of the limit and pay it off in full every month. Don't go for additional credit cards thinking it will help your rating though. Instead have a basic range of credit on your file including utilities, mobile phone etc.
  • edited 23 May at 11:12AM
    mwarbymwarby Forumite
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    edited 23 May at 11:12AM
    If the OP was in stable employment I’d agree, but the OP has yet to start the new job(after a prolonged spell out of work), and a new employee is quite vulnerable. The OPs credit history will improve hugely in a year if he does nothing
  • sammy32683sammy32683 Forumite
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    10 Posts
    Yes in most credit applications they ask for length employed. If you put one month the lender may think it's too risky. Even if you didn't have bankruptcy if you had no employment I can't see many lenders giving you a credit card. 
  • keepcalmandstayoutofdebtkeepcalmandstayoutofdebt Forumite
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    Never. Ever having a dro 8 years ago and a flashing green nearly 900 score the best % limited I ever got was... 37% (and this was across a lot of lot of min wage jobs in 6 years/consistent employment of having just 'ONE credit card rebuilder' over the years)
    I had to be grateful the short term loan provider who also does cards after proving successful pay back allowed me to borrow a £1000 card as a balance transfer at.29% with no fee (8 years almost after the dro)
    Sadly with PayDown plan now installed by the fca readily for cards I would say don't bother, having a card isn't worth it.
    After 8 years I've come to realise 29% is as good as it gets even with a 'good' score.
    I write as someone who never missed a credit card repayment in 6 years and when thrown into 'paydown' against my will (having paid 4 enhanced booster payments last year so more then the minimum monthly) I had nothing to thank or attribute the credit card industry for. 


  • cymruchriscymruchris Forumite
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    You should try the eligibility checkers on Vanquis - Aqua - and Capital One websites. Firstly check your chances of approval with each. Should you get a positive message that you are likely to be accepted (or even approved) - then pick only ONE card to apply for (even if more than one says 'yes') - then apply. If accepted (You won't know for absolute sure until a hard search is carried out) then wait for your card - and each month spend on it with money that you would normally spend from your regular account, ensuring that you KEEP that money ready to pay the statement balance in FULL once your bill is received. Paying in full every single month without fail will begin to demonstrate that you can be trusted more. Over a period of time, your credit history of the past becomes less relevant, and your current behaviour important. If for any reason you lose your job - DON'T be tempted to use the credit card as 'Money to spend'. Put it in a drawer and forget about it until you become more stable once more. If your job continues, then 6 months after applying for your first card, you can try for your second. (Still with the sub-prime companies I've mentioned). You may find your first card credit limit is raised if you follow the pattern of spend/pay in full mentioned above. If you're turned down for a card - wait a few months and try again.

    I started with one card from Vanquis, then Aqua, then Capital One. My first card had a limit of £400, and has been increased over time to £2000. I've recently CLOSED my Capital One card, as the limit remained low, but it was good to help get established. Last month I applied and was accepted for a Virgin card, and now have an overall credit limit of £10k between the cards I have. Since taking my first card, I haven't paid a penny in interest (aside from an emergency cash withdrawal in Taiwan of £30 - for which I was very glad to have a working credit card in my pocket! - Talking of which - never use a card for cash withdrawals unless it's an absolute emergency! and I mean - ABSOLUTE emergency!)

    We all have to start somewhere - and we can all follow different paths to achieve future financial stability - so the way I did it - and recommend doing it may not be suitable for everyone - but my advice would be to start your credit history improvement as early as you can, but be extremely careful to ensure you manage it responsibly.

    An ex-bankrupt on a journey of recovery. Feel free to send me a DM reference credit building credit cards from the usual suspects :) Happy to help others going through what I've been through!
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