Credit card for EU individual living in the UK

cymruchris

Your situation is a time when I would (from personal experience) recommend Loqbox. There will be people here who are dead set against it - but that's the internet for you - we all have opinions and experienced to share - and I'm sharing mine with you.  In essence, you save a fixed amount of money every month for a period of 12 months. At the end of the 12 months, you either open a regular current account and ALL of the money is transferred into it (currently the favourite is TSB) or you can choose to get all the money back minus a £30 fee. (If you apply for the TSB account and get rejected -which is highly unlikely by then - you'll get all your money back without the £30 fee). 

At the start you pick a monthly figure - they offer a range that you can choose - but I'd recommend the higher end if you can afford to save - as the bigger numbers look more like a substantial loan (you can go as low as £10 a month) - I did £200 a month. £200 over 12 months is £2400 in total that will go into your savings pot. Once you've started though you can't vary your payment, so choose carefully in the beginning.

Although at any time you don't actually owe them any physical money - the way it works is that you take out a credit agreement that you agree to pay £200 a month over 12 months.  Each month your £200 goes out by direct debit into your savings pot. They then report an active loan on your credit file, starting at a balance owing of £2400, and update it monthly with a 'paid on time' marker. As each month goes by, a new entry is recorded, building up a history of £200 payments off a 'loan', reducing the balance month by month. At the end of 12 months the account is marked as 'settled' and you then have a fully paid, well-managed loan account that has gone through its term, adding to your financial history. When a future lender looks at your credit file, they will see that you took out a loan for £2400 and successfully paid it all back. 

You can cancel at any time and get your money back - but that would defeat the object of building up your history.

For someone in your position with such limited history - I think this would work well for you. 

I did it when I was only getting sub-prime cards (previous bankruptcy) - and since completion - I've gotten some mainstream cards (lower APR's and higher limits). I'm absolutely confident it benefitted my history footprint for me. 

Remember your 'score' in any of the CRA's is a made up number that will go wildly up and down. It's more important to focus on building positive financial history. You're on the way with a mobile phone contract, and being on the electoral roll.

Thrugelmir

dave1345 said:

Thrugelmir said:

Apply to your bank for a loan or overdraft if you require funding for a purpose. Churning cash through a credit card doesn't provide evidence of anything in particular. 

A loan might be cheaper if you need to borrow money. However, using a credit card for everyday purchases and then paying off in full at the end of the month does build credit history and shows you can be sensible with credit. The latter is what it sounds like the OP wants to do.

That's the problem with folklore. Simply self perpetuates without foundation. 

bhjm

ColinFGS said:

Hello everybody

I am an EU individual living in the UK. I arrived in the UK in October 2019 and since then I am full time employed. I have an UK bank account and a mobile phone contract. I am also on the electoral roll since Aug 2020.

I am trying to get a credit card to improve my credit score & history.

The problem is I am hitting a brick wall because I don't have at least 2 years of address history in the UK.

Most of the credit card issuers require at least 3 years of address history in the UK but I found some that ask for 2 years like BarclayCard for the Forward credit card.

Any suggestions for a credit card that will accept me with only 1 year of address history in the UK.

Thank you in advance for your replies.

Hello, as I am also EU national, I applied after 3 months of residency here - which was rejected. I spoke to my Bank(Nationwide) and they recommended, not to apply for any CC again within the next 3 months and that they usually need 6 months of history. The next application, 3 or 4 months later went through fine. 
Just take the basic steps, e.g the registered with utility supplier, broadbadn/mobile phone, water etc, it`s important that it`s in your name. Most importantly what my perspectivwe was to be registered on the electoral roll. Last time HSBC (automatically) approved my CC by verifying my ID with the ER.

phillw

Deleted_User said:

A rejection doesn't dent your credit file.  The application will simply show one search, no rejection.

If someone applies every three months and never sets up any accounts, then they can infer a rejection.

PRAISETHESUN

I can vouch for the LUMA card discussed earlier in this thread. I initially applied for it after living in the UK for about 6 months and was rejected. Waiting another 6 months, applied again and was accepted. Was also registered on the ER and had basic account with Santander in case it helps - my utilities didn't report to the CRAs at that point.

phillw said:

Deleted_User said:

A rejection doesn't dent your credit file.  The application will simply show one search, no rejection.

If someone applies every three months and never sets up any accounts, then they can infer a rejection.

One or two hard credit searches in isolation isn't a deal-breaker to be honest - as long as you're sensible about how often you apply. Lenders don't see rejections, only searches. A hard search followed by no new account opening could signify a rejection, or it could also imply that the customer decided not to accept the offer given to them (eg. the interest rate was higher than expected, no longer wanted the product, etc).

ColinFGS

Thanks everyone for the replies.

What is your opinion about Vanquish Bank?

[Deleted User]

As with all the other cards, there are no issues.  You just need to manage your card correctly. 

They're one of the most likely to accept you.

PRAISETHESUN

ColinFGS said:

Thanks everyone for the replies.

What is your opinion about Vanquish Bank?

All the sub-prime lenders are more or less the same. If you find one that is prepared to offer you a card then I'd jump on it. Just make sure to manage it properly and you'll be eligible for better cards down the line.

Alex9384

I would open another current account with Barclays (while keeping your Santander).
Barclays is the bank that like to push their credit cards to everyone. Many of my friends who have Barclays current accounts were offered credit cards even if they weren't that much interested in it.  I don't even have a current account with them, I applied for their card and got approved with significantly higher credit limit than on my other two cards at the time.

Also, having more than one current account is highly recommended. Normal current accounts also build at least some credit history. They are reported on your credit files. If you have multiple current accounts and none of them has ever been overdrawn, it shows that you can manage your finance well. Also, keeping multiple accounts open for a long time shows stability, which is what lenders like. Since most UK current accounts are free, you have nothing to lose. You can even have 10 current accounts if you wish. If you later switch one or two of them to a different bank (for switch bonuses), you still have other accounts with long history. If you only have one current account and switch it elsewhere or your bank close it because they don't want you as their customer anymore (it sometimes happens), then you'll lose your only account with long history and you'll have to start with new account from zero.

Alex9384

Pay your bills by Direct Debits if you can, not just manually!
If you have more than one current account (ideally at least 3), set up some standing orders from account A to account B, from B to C, and from C to A. I send £2500 in circle every month between all my accounts.
Some of my banks didn't want to give me a credit cards in the past. Then I set up my first DD and SO on that account and suddenly I was eligible for a credit card. It seems to me like having direct debits and standing orders on your accounts tick some boxes for them, as it shows you can make regular payments from that account every month. I believe you can somewhat 'tease' their algorithms that way.