Getting a Credit Card With No Credit History?

ForumUser7

gh148 said:

cymruchris said:

gh148 said:

cymruchris said:

gh148 said:

WillPS said:

gh148 said:

MrFrugalFever said:

gh148 said:

elasto said:

Getting your name onto the utility bills is a good suggestion. Both my broadband provider and my water company report to the CRAs.

Maybe try to get an overdraft with your current bank, no matter how small (but don't dip into it).

There are credit cards that evaluate you if you let them link to your bank account to see all your income and outgoings for themselves. One of those might offer you a low limit card to get you going.

I do have overdraft on my student current account. I've used it (since it's completely free arranged overdraft with no fees) but fully paid it off quickly.

So are you still a full time student AND working self-employed at the same time?
Gaining a decent rewards or cashback credit card shouldn’t take that long to do with a little perseverance and patience, however, you do not seem to be forthcoming in putting the legwork in to benefit from it so perhaps it’s not for you anyway?

Yes I'm a student and I'm self-employed/working in my company. Is that supposed to help or hinder?

Hinder x 2.

HSBC and TSB offer specialist student credit cards. Perhaps you could look in opening an account with one of them (they both need you to have a student current account with them).

So I looked into HSBC first as I already have a student account with them, however it seems they discontinued they student card or something in June. For the TSB card, I would've needed to have an account with them for at least 3 months anyway.

3 months isn't exactly a long time in the grand scheme of the world.

You could start a loqbox tomorrow, open a TSB account this week, and by the time you get to 3 months down the line or so, you'd likely get your first card.

Not everything can be done by this time tomorrow.

Thing is, what is most likely to be more of a factor here, income or the complete lack of a credit history? When I applied for an American Express card for example, even though their eligibility checker gave me good chances, I still got automatically rejected, and the rejection email clearly stated that it was my income that is the issue. 

You likely won't get an Amex in 3 months.

Additionally if you completed a FULL application, a 'Hard search' will now have appeared on your credit file history. Every time you complete a FULL application (go beyond eligibility checkers) you will get a hard search.

Lots of hard searches and no new accounts shows future lenders that you've not been successful in your applications.

So if you're applying left, right and centre - stop - otherwise you're digging yourself a hole that will take some time to get out of.

It'll be a combination of lack of history and lack of income that will impact your application with many providers.

You can do something about the former, but for the moment you can't do anything about the latter.

I would have thought by now you'd have got the picture that obtaining credit is a journey, not an overnight guarantee that you'll get a £100k limit on a card with cashback, rewards and a big fat welcome bonus.

Small steps towards building is what it needs. As time goes on and you finish your study no doubt your income will increase. If you take some of the steps now that have been outlined, by the time you get to that point, you'll be in a far better position to get better/bigger offers.

I'm obviously not expecting wonders, but as it is right now I can't get any credit card, not matter how low the credit limit is. Even got denied by my own bank as they said their minimum credit limit of £500 is too much for me.. Even if I did somehow get an amazing credit history somehow, would it even be enough though or will income also win out? In terms of full-on applications, the only full one I've done is really with Amex, where again it didn't even go through to a human, rather I got an instant denial anyway based on income.

I think you can ask for a human to review a decline - although may not be worth it given the income was stated as the issue

th081

You won't get any credit card until you have more income. If your own bank won't give you a card with a limit of £250 then it's very unlikely anyone else will. While the risk is low for them in monetary terms the hassle factor of chasing a small debt is high. 

whyso

You have a lot of negatives against you.

You're a student.
You're self-employed
You have declared a very low income
You have a sparse credit file

All these things spook lenders, and in today's climate make you unlikely to get credit.

Putting student as your employment on an application will pretty much get you an instant 'no'.

Putting self-employed with such a low income will be an instant 'no'. A much higher self-employed income (with a sufficiently long, well managed, credit history) will get you a 'maybe' along with a request for more info so they can perform a manual review.

Get a £20 a month Loqbox 'loan'.
Get your name on a utility bill.
Get a cheap mobile phone contract.
Get a low limit catalogue account.
Don't use your overdraft.
Then wait 6 months and try again for a credit card. If you get another 'no', try again in another 6 months.

And most importantly, do it now!!

If you think spending one year building up a credit history is too long... 5 years from now when you need a credit history for a mortgage, car loan, etc. you'll kick yourself for not doing it sooner when you're getting refusals for things your friends can easily apply for.

gh148

th081 said:

You won't get any credit card until you have more income. If your own bank won't give you a card with a limit of £250 then it's very unlikely anyone else will. While the risk is low for them in monetary terms the hassle factor of chasing a small debt is high. 

What kind of income is the minimum then? I could always just pay myself out more each month if necessary just to make my income look more attractive. 

born_again

gh148 said:

th081 said:

You won't get any credit card until you have more income. If your own bank won't give you a card with a limit of £250 then it's very unlikely anyone else will. While the risk is low for them in monetary terms the hassle factor of chasing a small debt is high. 

What kind of income is the minimum then? I could always just pay myself out more each month if necessary just to make my income look more attractive. 

There is no magic figure that will get you a CC. Each lender has their own criteria for their products, that will change depending on their risk appetite @ any given time.

As @whyso said your status has so many flags that even a human looking at it will say no. If your own bank (who know your status) will not give you a card. Then odds on no one will. So stop applying, as that makes you look desperate. 
Look at the advice given to put some meat in your credit history & give it a bit of time & you will get a CC, but it is never going to be a overnight process.

If you think this is hard, wait till you want a mortgage & being self employed. 

gh148

So going through my files one more time, I did actually spot that a closed loan agreement. It was for some insurance my uni made my buy out, however it was in my name but was being paid from someone else's  account. So what about that? Is that a good piece of credit history then or because I wasn't being paid by me but in my name just nullify any value it had?

whyso

gh148 said:

So going through my files one more time, I did actually spot that a closed loan agreement. It was for some insurance my uni made my buy out, however it was in my name but was being paid from someone else's  account. So what about that? Is that a good piece of credit history then or because I wasn't being paid by me but in my name just nullify any value it had?

It's clearly not enough if you have been getting refused when you have made applications and performed eligibility checks.

It doesn't matter who paid it, so long as the agreement was in your name. The lender will not pass to the credit reference agencies the details of who paid it, only the details of the person responsible for the contract.

You need to be able to show a lender that you are reliable and self-sufficient. You typically start small and show that you can pay your way in life. You have to show that you can handle your finances. We all start will typical bills like gas, electricity, mobile phone contracts, overdrafts that we have access to but don't use, monthly DD car insurance, etc. It is very rare for a lender to give someone access to revolving credit without first having proof that they are a reliable person. 

Having something, anything, on your credit file is not going to show your are reliable and trustworthy. The length of the relationship with a creditor, with a history of on time repayments, is more important. 

It sounds like your insurance agreement was opened and then closed relatively quickly. How long was it opened for? How many months of on time payments are noted on your credit file? Was there any missed payments? Is it noted as settled or partially settled?

Try the things that were mentioned before. If you perform the actions outlined in the posts above, you may qualify for a basic credit card within 6 months. Aqua typically give cards to people with sparse credit history. Spend on the card each month and then pay the statement balance in full AFTER the statement is generated. Do that for a year and you may qualify for a better card. 

Truthfully though, the likely reasons for you being refused are that you a student and that you're self-employed with a low salary. They are massive red flags to lenders. Practically zero chance of getting a card.

Use the time remaining as a student to build yourself a good credit history with the steps outlined above, while performing eligibility checks once a month, and accept that it may not be possible to get a card for the foreseeable future. 

gh148

whyso said:

gh148 said:

So going through my files one more time, I did actually spot that a closed loan agreement. It was for some insurance my uni made my buy out, however it was in my name but was being paid from someone else's  account. So what about that? Is that a good piece of credit history then or because I wasn't being paid by me but in my name just nullify any value it had?

It's clearly not enough if you have been getting refused when you have made applications and performed eligibility checks.

It doesn't matter who paid it, so long as the agreement was in your name. The lender will not pass to the credit reference agencies the details of who paid it, only the details of the person responsible for the contract.

You need to be able to show a lender that you are reliable and self-sufficient. You typically start small and show that you can pay your way in life. You have to show that you can handle your finances. We all start will typical bills like gas, electricity, mobile phone contracts, overdrafts that we have access to but don't use, monthly DD car insurance, etc. It is very rare for a lender to give someone access to revolving credit without first having proof that they are a reliable person. 

Having something, anything, on your credit file is not going to show your are reliable and trustworthy. The length of the relationship with a creditor, with a history of on time repayments, is more important. 

It sounds like your insurance agreement was opened and then closed relatively quickly. How long was it opened for? How many months of on time payments are noted on your credit file? Was there any missed payments? Is it noted as settled or partially settled?

Try the things that were mentioned before. If you perform the actions outlined in the posts above, you may qualify for a basic credit card within 6 months. Aqua typically give cards to people with sparse credit history. Spend on the card each month and then pay the statement balance in full AFTER the statement is generated. Do that for a year and you may qualify for a better card. 

Truthfully though, the likely reasons for you being refused are that you a student and that you're self-employed with a low salary. They are massive red flags to lenders. Practically zero chance of getting a card.

Use the time remaining as a student to build yourself a good credit history with the steps outlined above, while performing eligibility checks once a month, and accept that it may not be possible to get a card for the foreseeable future. 

According to the report, there were a total of 25 months worth of payments for that insurance. And no missed payments or anything.

born_again

Given all the declines, clearly not enough.

So best to sit back wait a while before doing any more applications.

th081

There is a well known saying about bankers, umbrellas and rain. In a similar vein credit card companies like to lend to people who don't really need it. Iater on you will find them throwing credit at you to get you into debt so they can charge you interest. Maybe you have dodged a bullet.