Starting my 18 year old son on his credit journey

SharronF72

Morning all. 
I would like to start my 18 year old son on his credit journey, so we can start building a credit rating for him. He currently works 4-5 days a week, which was his Sat job at college but has now turned into something more robust while Covid is around (his planned career path is definitely on hold for the time being!). He earns about £50 a day, so is currently below the tax bracket. He has no credit rating at all. We did try a quick check for Aqua, but no luck. Rumour is the best way to start his credit off is a Sim only deal, but I understand some (if not all) of these will also require a credit check...so vicious circle! He's solvent, has substantial saving (£3k) and is happy to do whatever it takes to start his credit journey, but we'd appreciate some ideas and guidance please! 
Thanks

DCFC79

SharronF72 said:

Morning all. 
I would like to start my 18 year old son on his credit journey, so we can start building a credit rating history for him. He currently works 4-5 days a week, which was his Sat job at college but has now turned into something more robust while Covid is around (his planned career path is definitely on hold for the time being!). He earns about £50 a day, so is currently below the tax bracket. He has no credit rating history at all. We did try a quick check for Aqua, but no luck. Rumour is the best way to start his credit off is a Sim only deal, but I understand some (if not all) of these will also require a credit check...so vicious circle! He's solvent, has substantial saving (£3k) and is happy to do whatever it takes to start his credit journey, but we'd appreciate some ideas and guidance please! 
Thanks

Credit rating is only seen by you, credit history is whats important.

What bank account does he have ?

Maybe ask them if he could apply for a credit card.

I never went down the route of a sim only deal, I must have run my bank account well for a year or 2, always a positive balance in it and got a credit card after a couple of years.

Has he tried signing up for MSE credit club, Equifax or Clearscore ?

[Deleted User]

SharronF72 said:

Rumour is the best way to start his credit off is a Sim only deal, but I understand some (if not all) of these will also require a credit check...

Another rumour is that he should make sure he's on the ER, be patient for a few months and then approach his own bank for a card. 

If he's managed his accounts with them well, they're more likely to trust him. However, with a minimal income, he may need to wait until he's working more substantially.

yksi

Get him to sign up for the MSE Credit Club and ClearScore, and you say he has "no credit rating at all" - he might need to contact Experian/TransUnion/Equifax direct to get himself set up and be able to log in. Then do the search in Credit Club or Clearscore to see what credit cards he might be eligible for. It sounds as if his credit history is too thin to qualify for the sub-prime cards, for example Aqua's siblings like Fluid, Marbles and its counterparts like Capital One, but maybe one will show up. If he is on the electoral roll, and nothing else looks like a go, this might be a rare example where it's worth joining Loqbox. It will be set up to save a set amount every month into the account (£20 is fine) and report on his history as "meeting his credit card repayments", which is what lenders like to see.

We normally advise steering clear of Loqbox because it pays no interest and can ding your history if you don't meet the "repayments" every month. But it sounds as if your son has a responsible attitude to money, has his parent looking out for him and can well afford to stash away £20 a month.

[Deleted User]

SIM only is more likely to be approved as they can simply cut you off if you don't pay

macman

I agree: £5 SIM only contract or similar is the way to go.

And make sure he's on the ER, obviously.

Jamesyb123

When I turned 18 Halifax who I already banked with gave me a credit card with them it was only £500 limit but I was only on 12k a year at the time. Has he checked with his own bank? If he has savings with them too he might have a good internal record with them

SharronF72

Fab, thanks all. Credit Karma said he's not eligible for anything, but I will get him to check the others. And we'll chat to Nationwide, who we all bank with. Thanks! 

PRAISETHESUN

Make sure he checks his files from all 3 CRAs - Experian, Equifax and TransUnion. Also make sure he is on the ER. He might need to jump through a few hoops to get access, since it sounds like he has a thin file, but it shouldn't take too much effort on his part. In any case aSIM only contract and/or a sub-prime credit card are probably all he needs - there's no need to pay for any service to improve your credit history.

I'd also recommend using eligibility checkers from the lenders directly, rather than from Credit Karma - they are not a lender, so I would argue their assessment of eligibility may not be particularly accurate. Outside of that, having a chat with his bank might be useful. If none of that works, it might have to wait until he is a bit older and has a better income before trying again.