How to build credit file for 18 year old

kezzygirl

Hi everyone
My daughter turned 18 today and we have been discussing finances and budgeting for some months now. She has just over 3k in a child trust fund and we are transferring this directly to a LISA for her to start saving towards a home. 
We have changed her bank account to an 'adult' one, but we are keen to start developing her credit history. I have looked into credit cards for her and she has been declined for a couple. I have signed her up for money saving credit club to view her file but there isn't one available for her- obviously as she is a blank slate. 
Any suggestions as to how we can help her begin to demonstrate a good lending history? Of course we have counselled her about the importance of clearing the card monthly and she will purely be using it to begin to show a good repayment history ie. A tank of petrol per month and pay it in full. 

Spies

For what purpose? Credit score isn't the be all and end all. It's a myth that you need a high credit score for lenders to consider you, they look at more factors than that.

If you must, Aqua or Vanquis

TadleyBaggie

To be fair the OP never mentioned “score” once and obviously knows it is the history that is important. 

Spies

TadleyBaggie said:

To be fair the OP never mentioned “score” once and obviously knows it is the history that is important. 

If it's to help secure a mortgage down the line no credit history is irrelevent, none is better than bad. 

martinbainbridge1975

my first thought was managing direct debits coming out of the account, maybe a mobile phone contract

kezzygirl

Spies said:

For what purpose? Credit score isn't the be all and end all. It's a myth that you need a high credit score for lenders to consider you, they look at more factors than that.

If you must, Aqua or Vanquis

I didn't mention credit score, I said credit and repayment history. I know that lenders cant see a credit score. Everyone needs a credit history, whay about when she buys a house? How can they look at more factors if she is unable to have any credit?hence my question.

kezzygirl

Spies said:

TadleyBaggie said:

To be fair the OP never mentioned “score” once and obviously knows it is the history that is important. 

If it's to help secure a mortgage down the line no credit history is irrelevent, none is better than bad. 

So would she be likely offered a mortgage with absolutely no credit history or evidence that she is a good at making repayments? Doubt it very much.

kezzygirl

TadleyBaggie said:

To be fair the OP never mentioned “score” once and obviously knows it is the history that is important. 

Well spotted.

Spies

kezzygirl said:

Spies said:

TadleyBaggie said:

To be fair the OP never mentioned “score” once and obviously knows it is the history that is important. 

If it's to help secure a mortgage down the line no credit history is irrelevent, none is better than bad. 

So would she be likely offered a mortgage with absolutely no credit history or evidence that she is a good at making repayments? Doubt it very much.

I had little to no credit history and got a mortgage just fine, you may need to have it manually underwritten like I did, and have proof of bills but you won't be refused in the basis of no score or history. 

cymruchris

A few things to get you started - you have the first grown up current account - make sure it reports to the CRA's - there are three main ones - have you only signed up to one?

Make sure she's on the electoral roll.

What's the deal on her mobile at the moment? It would be good to get on a sim-only contract if the handset she has is reasonable. You can get contracts as short as 12 months - so these would also report to the CRA's.

If she has an income, once there's 3-6 months of 'history' showing on her CRA's - then apply for one of the credit builder cards from the likes of Vanquis, Aqua or Capital One. Use the eligibility checkers on their website first. Don't use a comparison site.

She'll likely get given a low limit and a high APR. Use it a little every month for every day spends, and pay off full without fail - another 6 months down the line either apply for a credit increase (if it was a low level to start with) or open a second card from another provider. (Again using eligibility checkers directly on lenders websites).

That should get her on the path to building a positive credit history.

Further down the line of continued paying in full - she'll likely begin qualifying for better cards and rates.

SiliconChip

I'd have thought the first thing to do is get her on the electoral register, which will boost her chances of securing credit of any type when she comes to apply for it, and ensure that she is in a position to exercise her vote in the forthcoming General Election.

 https://www.gov.uk/register-to-vote