Recent arrival to UK credit crisis

JoshuaWB

To whoever can help,

My wife and I have just moved the UK (I grew up here and am a citizen) with our sonfrom the US. We are really struggling with knowing how to proceed wisely with the savings we have in order to gain credit and work towards a mortgage for our own place. In the US we enjoyed great credit scores and each used credit cards.Those are useless to us here. It seems most credit card companies require us to be resident for three years. Also we are both freelance photographers and so have no company commitments and will be a little slow building up our income over here. We feel at a disadvantage as far as credit and mortgages are concerned. Any advise would be amazing.

Thank you so much,

Joshua

born_again

Hi & Welcome.

Credit scores mean nothing over here, other than to the CRA. Lenders have their own internal scoring & never see your CRA score.

You 1st need to build up some credit history. So most start with a mobile contract. As well as paying bills via DD's. 

Did you have Amex while you were state side? They might be a place to start. 

CliveOfIndia

That's top advice from @born_again .  And yes, unlike in the US, in the UK the scores you see on your credit report are meaningless, since they're not even seen by any lender.

Basically, anything that involves a line of credit will be useful in starting to build a credit history.  A mobile phone contract is a good start as mentioned above, along with utilities, broadband, etc.  Try an eligibility checker to see whether you've got a chance of getting a "credit-builder" card (although there's no guarantee).

Some useful information here that may be of some help: https://www.moneysavingexpert.com/loans/build-credit-history/

Marchitiello

Seconding the above suggestion about Amex as they do have an official International Transfer Programme (and sign up to a Utilities/mobile DD) . Also if you have been a customer of HSBC US before they sold their US Retail Banking business, they may be able to help via their own Expat programme.

As a UK citizen, you can register on the electoral roll straight away, and I would recommend you do that.

grumbler

JoshuaWB said:

In the US we enjoyed great credit scores and each used credit cards.Those are useless to us here. It seems most credit card companies require us to be resident for three years. Also we are both freelance photographers and so have no company commitments and will be a little slow building up our income over here. We feel at a disadvantage as far as credit and mortgages are concerned. 

Lack of CCs isn't a big loss/disadvantage. They are  too expensive for borrowing and can help only with monthly cashflow.
Yes, some creidit history is important for a mortgage, but a deposit and stable income that you can prove are even more important. There are other ways of building the history besides credit cards.

WillPS

grumbler said:

JoshuaWB said:

In the US we enjoyed great credit scores and each used credit cards.Those are useless to us here. It seems most credit card companies require us to be resident for three years. Also we are both freelance photographers and so have no company commitments and will be a little slow building up our income over here. We feel at a disadvantage as far as credit and mortgages are concerned. 

Lack of CCs isn't a big loss/disadvantage. They are  too expensive for borrowing and can help only with monthly cashflow.
Yes, some creidit history is important for a mortgage, but a deposit and stable income that you can prove are even more important. There are other ways of building the history besides credit cards.

Credit cards can be the very cheapest form of borrowing (free, even) as well as one of the most expensive.

Get a mobile contract ASAP (make sure it's a contract rather than a prepay arrangement, as the latter won't touch your credit record). Get on the electoral roll today if you haven't already.

Unfortunately self employment is likely to work against you in terms of credit worthiness, some lenders might not even want you at all - but either way it makes sense to build up a history of responsible credit use now so you have as many options as possible in future.

If it's rewards on spending you're after then a Chase current account is probably the way to go, 1% back (capped at £1500 after a year) is likely to beat many credit cards anyway.

Alex9384

Did you have American Express card in the US?

Does anyone know if Chase would be able to do the same thing? If you can use Chase UK debit card in the US Chase ATMs for free, that makes me think they are not totally separate and maybe they can offer something similar to Amex?

Marchitiello

Alex9384 said:

Did you have American Express card in the US?

Does anyone know if Chase would be able to do the same thing? If you can use Chase UK debit card in the US Chase ATMs for free, that makes me think they are not totally separate and maybe they can offer something similar to Amex?

They are different entities owned by the same Parent group, that allow “cross benefits” for other companies within the same group. It is pretty straight forward to manage (6 digit BIN number preloaded in their ATM system and/or when it makes the call to the issuing bank to see the balance, it recognise that no charge needs to be applied). Santander does the same worldwide (Including East Coast of US where they have a presence).

in any case, Chase not yet offer “credit” products and thus not suitable for the OP

Chrysalis

Credit builder cards might also work, dont worry if you get a super low limit and no 0% as you still get the zero interest for paying it in full every month.

PRAISETHESUN

Had similar issues when I moved to the UK from overseas - the lack of UK address was the biggest issue at first.

Getting yourself on the ER is a good first step. From there you probably want to look at credit (re)building cards, or cards with banks you have an established relationship with. Some banks want 3 years address history, but not all do. If it helps, I had success with the LUMA card by Capital One (https://www.luma.co.uk/ ). Had a rubbish limit and interest rate (which doesn't really matter if you pay in full) but it was happy to accept my with ~12 months UK address history and was my stepping stone to building UK credit history.

Other then that it's mostly a waiting game really - get some sort of credit, manage it responsibly and eventually lenders will become more comfortable and offer you better deals, higher limits, etc.

gt94sss2

You may also want to contact HSBC. They are used to dealing with customers moving to the UK and I think can use your US credit rating to consider what products you qualify for in the UK