How best for young person to start building a credit score?

whiter74

Hi after some advise please.
My sons (19) has his first full time job (since 4mths ago ) after leaving sixth form education, he's also living at home.  He's on the Electoral roll and had a bank account for 3 years.  He's never had credit before , e.g mobile contract or any other outgoing so no score.  Nothing on eg. Experian about him. 
He is looking to get a car next year with a small car loan. 
So after some advise on how best for him to start building a positive credit score ?????   
Thanks 

[Deleted User]

The young person firstly needs to understand that he has to build a good credit history, not a score.  The score is just a comedy gimmick provided for entertainment purposes only, with no real relation to his credit worthiness.

If he trusts himself, getting a credit card and clearing in full each month us the easiest way to build some history.  A phone contract is also a useful tool.

In the meantime, he should save as much as he can, and negate the need for a car loan at all. thus making himself richer in the process. 

Remember that he has three credit files to check, not just Experian.

whiter74

thanks for reply he is trying to save as much as possible . 
Could a secured credit cards offer valuable benefits and start good credit history building ?

[Deleted User]

That's very much a last resort and not very common in the UK. I think HSBC still do one.

Try his own bank or a sub prime provider first.

dr_adidas01

whiter74 said:

thanks for reply he is trying to save as much as possible . 
Could a secured credit cards offer valuable benefits and start good credit history building ?

Sadly secure cards aren't that common here in the UK and I think the only one that was offered was from Capital One, not sure they even offer this anymore.

I think @Deleted_User might be confused as HSBC UK have never offered a secured credit card, you son has what is called a thin credit file as he's had no credit products so lenders have nothing to base there decisions on.

He may want to try the eligibility checkers say with Capital One, Aqua and Marbles or even Barclaycard Forward to see if he's eligible.

He could also try his own bank to see if they can offer him a credit card.

sourcrates

Credit cards can be a double edged sword, they are fine if you use them correctly, but not everyone does, younger people in particular do tend to have more of a “live for today” attitude, and starting to build up debt at such a young age is not to be recommended.

Of course, on the other hand he may be very disciplined with it, and use it in the right way, paying off his balance in full every month, he won’t make the card company any money, but I suppose the lad has to start somewhere.

Good credit history is what he should aspire to, not credit score, the score in the UK is not an indication of anything, it’s merely a marketing tool used by the CRA’s to induce interest in credit score improvement products, maybe start with a sim only contract, then build up history that way.  

PRAISETHESUN

As above, ignore the score. Focus on building good credit history.

I echo the posts above about credit cards being a good way to build credit history, as long as they are used responsibly. Your son has a thin credit file, so lenders will initially be hesitant to lend to him. Trying a sub-prime provider or their current bank will likely be the best bet. Make sure to use an eligibility checker before he applies. Make a few small purchases (things he'd normally buy anyway, eg. fuel, groceries, etc) and pay off the card in full every month.

DCFC79

As long as he will only spend a small eg a food shop and you pay him back.
You mention a small car loan so is he working then ?
Can he not save up for a car ?