Credit Score at 18

Dylanm2002

PRAISETHESUN said:

@OP - I think you're failing to grasp the difference between your "credit score" and your "credit history"

Credit score - marketing gimmick devised by the CRAs. Ignore this.
Credit history - the record of your financial behavior that is used by lenders to determine if you are eligible for their products. This is what you need to focus on.

For a mortgage you need decent credit history - possibly a few years worth. Indeed as was mentioned above, this is a marathon not a sprint. I understand your problem as I had a very similar issue when I first moved to the UK - I basically didn't exist as far as the CRAs were concerned. It's a fairly straightforward process to get things sorted but it will take time.

You need to go direct to the CRAs (Experian, Equifax and TransUnion) and request a copy of your statutory credit report. They are obliged to provide you with this information if you request is. If/when they come back saying they are unable to locate your records, then you need to raise a formal complaint and provide them with proof of identity and this should then get you access to your (probably empty) records.

The second issue will then to build some credit history in your name. It's a bit of a catch 22 in that you need credit history in order to get credit in order to build history so you may struggle for a bit here. Try asking your bank if they have anything to offer otherwise you'll need to start with a sub-prime credit card (try an eligibility checker first) and go from there. Making only small purchases you'd usually make anyway (eg. groceries, petrol, your usual round at the pub, etc). Getting a phone contract in your name may also help. If your current deal is in your Dad's name and they won't transfer it to you, then consider cancelling it and taking out a new one in your name. Over time all these will start to get reported to your credit files, and your history will be built up and (hopefully) show that you can be trusted with larger limits, such as a mortgage down the line.

Thanks, I will definitely do this with the CRAs. I contacted Experians support yesterday but will definitely follow those steps with Equifax and TransUnion.

Dylanm2002

cymruchris said:

I can see that you are clearly trying to improve your creditworthiness rather than your 'score' - and you've mentioned that you don't 'need' credit, but are simply thinking of the future as to what steps you can take now to ensure you are more attractive to lenders at a later date. Assuming all of this is true, and you don't try to go crazy and spend spend spend without paying anything back (and it sounds like you wouldn't) - I'd think about the following:

- You are on the electoral register - that's good.

- Who are your bank accounts with - are they savings accounts or current accounts? If savings accounts, they won't report to your credit file. One of the easiest accounts it seems that you can open that does report is a Monzo account. You could put £5 in there - and not use it - and it would still give you the monthly 'green square' or 'tick' to show a well-managed account.

- Mobile phone wise- you may not be able to get a phone contract with a  phone in advance - but you should be able to get a sim-only contract. If your current contract paid by your family can't transfer - then get a PAC code (if you want to keep your number) and apply via something like Three or 02 to get a sim-only deal for £10-20 a month over a 12 month contract.

- Do you have your provisional (or full) driving license yet? Or a valid passport? That might be useful in terms of ID.

- Consider setting up a Loqbox - (There are those here that laugh at this - but I've used it - and can confidently say it helped me) - which is where you agree to pay £x into a savings fund for 12 months - and at the end - you either get it back minus a £30 fee, or you open a new current account (usually with the TSB) and ALL of the funds are transferred into it. It reports on your credit file as a loan, and when completed, is marked as satisfied. Payments can be from £10-200 - but once set, you can't change the payment amount (fixed term contract) and if you change your mind half way through, it could have a negative effect on your file - so only consider this if you can commit to 12 months worth of saving. (The larger the amount you save - the more positive the impact will be on your file).

Once all of the above has been running for 3-4 months - try the eligibility checkers for the sub-prime credit cards - these include Aqua, Vanquis, Capital One amongst others. If you get the message of 'Likely to be approved' or 'Approved' - Only apply for ONE card. If successful - spend a few pounds monthly, wait for your statement and then pay in FULL - EVERY month without fail. (Best to set up a direct debit). 

After 6 months of running your first credit card as outlined above - then try the eligibility checkers for another sub-prime card - and again, make only ONE application. Rinse and repeat going forwards.

If you get turned down for any card after a full application - don't apply immediately for another one. Wait 3 months and try again.

Building a positive credit file takes time and patience - but with the right approach - you can put yourself into a position of demonstrating good financial management over the period of a year or two. And as always gets said - ignore scores - focus on the detail of your accounts, history, payments and accuracy of data.

Thanks, I have 2 current accounts, one with NatWest one with Lloyd’s. Will look at monzo when I get a chance. I’ll also have a look at the LoqBox you suggested, seems like a good idea which would also help me save.

Dylanm2002

jay1804 said:

How long have you had your bank account(s) for?  Did you get any letters/communications from your bank(s) saying when you turn 18 they will start to report to the CRAs? 

I’ve held an adapt account with NatWest for years now, made a current account for Lloyds and NatWest when I turned 18. Haven’t received anything about them reporting to the CRAs.

cymruchris

Dylanm2002 said:

cymruchris said:

I can see that you are clearly trying to improve your creditworthiness rather than your 'score' - and you've mentioned that you don't 'need' credit, but are simply thinking of the future as to what steps you can take now to ensure you are more attractive to lenders at a later date. Assuming all of this is true, and you don't try to go crazy and spend spend spend without paying anything back (and it sounds like you wouldn't) - I'd think about the following:

- You are on the electoral register - that's good.

- Who are your bank accounts with - are they savings accounts or current accounts? If savings accounts, they won't report to your credit file. One of the easiest accounts it seems that you can open that does report is a Monzo account. You could put £5 in there - and not use it - and it would still give you the monthly 'green square' or 'tick' to show a well-managed account.

- Mobile phone wise- you may not be able to get a phone contract with a  phone in advance - but you should be able to get a sim-only contract. If your current contract paid by your family can't transfer - then get a PAC code (if you want to keep your number) and apply via something like Three or 02 to get a sim-only deal for £10-20 a month over a 12 month contract.

- Do you have your provisional (or full) driving license yet? Or a valid passport? That might be useful in terms of ID.

- Consider setting up a Loqbox - (There are those here that laugh at this - but I've used it - and can confidently say it helped me) - which is where you agree to pay £x into a savings fund for 12 months - and at the end - you either get it back minus a £30 fee, or you open a new current account (usually with the TSB) and ALL of the funds are transferred into it. It reports on your credit file as a loan, and when completed, is marked as satisfied. Payments can be from £10-200 - but once set, you can't change the payment amount (fixed term contract) and if you change your mind half way through, it could have a negative effect on your file - so only consider this if you can commit to 12 months worth of saving. (The larger the amount you save - the more positive the impact will be on your file).

Once all of the above has been running for 3-4 months - try the eligibility checkers for the sub-prime credit cards - these include Aqua, Vanquis, Capital One amongst others. If you get the message of 'Likely to be approved' or 'Approved' - Only apply for ONE card. If successful - spend a few pounds monthly, wait for your statement and then pay in FULL - EVERY month without fail. (Best to set up a direct debit). 

After 6 months of running your first credit card as outlined above - then try the eligibility checkers for another sub-prime card - and again, make only ONE application. Rinse and repeat going forwards.

If you get turned down for any card after a full application - don't apply immediately for another one. Wait 3 months and try again.

Building a positive credit file takes time and patience - but with the right approach - you can put yourself into a position of demonstrating good financial management over the period of a year or two. And as always gets said - ignore scores - focus on the detail of your accounts, history, payments and accuracy of data.

Thanks, I have 2 current accounts, one with NatWest one with Lloyd’s. Will look at monzo when I get a chance. I’ll also have a look at the LoqBox you suggested, seems like a good idea which would also help me save.

I did a £200 a month Loqbox - £2400 over a year. Before I did it - I couldn't get a decent brand/low rate credit card for love nor money. Within a week of it showing as settled on my reports (and the money back in my account)  I applied for a Virgin card and got a reasonable limit at a much more attractive APR. Not that APR bothers me - as I only ever buy/pay in full at each statement. But if I needed it in an emergency in a year to two - I'd rather be paying 19.9 or 21.9% APR instead of 39.9% APR on my old sub-prime cards. 

Dylanm2002

cymruchris said:

Dylanm2002 said:

cymruchris said:

I can see that you are clearly trying to improve your creditworthiness rather than your 'score' - and you've mentioned that you don't 'need' credit, but are simply thinking of the future as to what steps you can take now to ensure you are more attractive to lenders at a later date. Assuming all of this is true, and you don't try to go crazy and spend spend spend without paying anything back (and it sounds like you wouldn't) - I'd think about the following:

- You are on the electoral register - that's good.

- Who are your bank accounts with - are they savings accounts or current accounts? If savings accounts, they won't report to your credit file. One of the easiest accounts it seems that you can open that does report is a Monzo account. You could put £5 in there - and not use it - and it would still give you the monthly 'green square' or 'tick' to show a well-managed account.

- Mobile phone wise- you may not be able to get a phone contract with a  phone in advance - but you should be able to get a sim-only contract. If your current contract paid by your family can't transfer - then get a PAC code (if you want to keep your number) and apply via something like Three or 02 to get a sim-only deal for £10-20 a month over a 12 month contract.

- Do you have your provisional (or full) driving license yet? Or a valid passport? That might be useful in terms of ID.

- Consider setting up a Loqbox - (There are those here that laugh at this - but I've used it - and can confidently say it helped me) - which is where you agree to pay £x into a savings fund for 12 months - and at the end - you either get it back minus a £30 fee, or you open a new current account (usually with the TSB) and ALL of the funds are transferred into it. It reports on your credit file as a loan, and when completed, is marked as satisfied. Payments can be from £10-200 - but once set, you can't change the payment amount (fixed term contract) and if you change your mind half way through, it could have a negative effect on your file - so only consider this if you can commit to 12 months worth of saving. (The larger the amount you save - the more positive the impact will be on your file).

Once all of the above has been running for 3-4 months - try the eligibility checkers for the sub-prime credit cards - these include Aqua, Vanquis, Capital One amongst others. If you get the message of 'Likely to be approved' or 'Approved' - Only apply for ONE card. If successful - spend a few pounds monthly, wait for your statement and then pay in FULL - EVERY month without fail. (Best to set up a direct debit). 

After 6 months of running your first credit card as outlined above - then try the eligibility checkers for another sub-prime card - and again, make only ONE application. Rinse and repeat going forwards.

If you get turned down for any card after a full application - don't apply immediately for another one. Wait 3 months and try again.

Building a positive credit file takes time and patience - but with the right approach - you can put yourself into a position of demonstrating good financial management over the period of a year or two. And as always gets said - ignore scores - focus on the detail of your accounts, history, payments and accuracy of data.

Thanks, I have 2 current accounts, one with NatWest one with Lloyd’s. Will look at monzo when I get a chance. I’ll also have a look at the LoqBox you suggested, seems like a good idea which would also help me save.

I did a £200 a month Loqbox - £2400 over a year. Before I did it - I couldn't get a decent brand/low rate credit card for love nor money. Within a week of it showing as settled on my reports (and the money back in my account)  I applied for a Virgin card and got a reasonable limit at a much more attractive APR. Not that APR bothers me - as I only ever buy/pay in full at each statement. But if I needed it in an emergency in a year to two - I'd rather be paying 19.9 or 21.9% APR instead of 39.9% APR on my old sub-prime cards. 

I'll definitely look at setting one up today, I know what you mean about those APR rates, it's ridiculous. I don't think it's gonna affect me much, as I only plan to buy what I can afford to pay off, only using a credit card for transactions for extra security. 
The Loqbox thing sounds like a really good idea, and i'll definitely look at setting one up. Thanks,

D3xt3r5L4b

Don’t use Loqbox

cymruchris

D3xt3r5L4b said:

Don’t use Loqbox

I knew you’d say that. 

Dylanm2002

cymruchris said:

D3xt3r5L4b said:

Don’t use Loqbox

I knew you’d say that. 

I looked it up, it's not great, but it's a start. My only option right now are to get an arranged overdraft (With i've done) and a credit building product. (Loqbox) Which i've done. I've only done £20 a month so it's not really money i'll miss, it's worth a shot. If it doesn't increase my credit rating by much then at least I get my money back -£30 if I return it to my bank account.

D3xt3r5L4b

Dylanm2002 said:

cymruchris said:

D3xt3r5L4b said:

Don’t use Loqbox

I knew you’d say that. 

I looked it up, it's not great, but it's a start. My only option right now are to get an arranged overdraft (With i've done) and a credit building product. (Loqbox) Which i've done. I've only done £20 a month so it's not really money i'll miss, it's worth a shot. If it doesn't increase my credit rating by much then at least I get my money back -£30 if I return it to my bank account.

You won’t know if it “increases your credit rating” unless you have insider knowledge on each lenders (commercially sensitive) lending criteria?

Also to get your money back from them you have to open one of their “selected” accounts - but again it begs the question whether you’ll be eligible to open said account dependant on a lenders views of you at the time. And the £30 “fee” is daylight robbery. 

Also with the overdraft, arranged or not, don’t ever dip into it.

cymruchris

D3xt3r5L4b said:

Dylanm2002 said:

cymruchris said:

D3xt3r5L4b said:

Don’t use Loqbox

I knew you’d say that. 

I looked it up, it's not great, but it's a start. My only option right now are to get an arranged overdraft (With i've done) and a credit building product. (Loqbox) Which i've done. I've only done £20 a month so it's not really money i'll miss, it's worth a shot. If it doesn't increase my credit rating by much then at least I get my money back -£30 if I return it to my bank account.

You won’t know if it “increases your credit rating” unless you have insider knowledge on each lenders (commercially sensitive) lending criteria?

Also to get your money back from them you have to open one of their “selected” accounts - but again it begs the question whether you’ll be eligible to open said account dependant on a lenders views of you at the time. And the £30 “fee” is daylight robbery. 

Also with the overdraft, arranged or not, don’t ever dip into it.

The facts are as follows:

On completion of a Loqbox - It will show 1 x fully settled loan account, with payments made on time on a monthly basis - that is a positive factor for anyone with little or no credit history. It demonstrates the fact that you can keep to a credit agreement, pay on time regularly, and settle it.

There's no doubt different lenders have different criteria - but I'm confident that there won't be many lenders that would look at person A with no credit history, and person B with a fully satisfied loan and say - oh person A looks far more attractive. 

If at the end of your Loqbox for any reason at all, you are not eligible for the accounts on offer - they will give you your money back in full without charging the £30 fee. However if you've paid it off in full, and during the time you've not got further CCJ's or any other nasties appear - it's incredibly unlikely you'll get turned down for an account. 

The fee is not 'daylight robbery' - they are a commercial company - they don't do things for free. They either make a commission from the TSB (the current favourite bank) and you get charged nothing, or you take the money back and make a payment of £30. Either way - that's the money they earn as a company for the service offered.

I know you don't like it - don't agree with it - and generally think it's a poor idea, and I'm happy to respect your opinion in thinking it - but I have an opposing view that for someone with little or no positive credit history, it helps to build a better credit file. It's not for everyone, but it does have its place.