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How to build credit file for 18 year old

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  • cymruchris
    cymruchris Posts: 5,558 Forumite
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    Spies said:
    You can transfer it into her name... 

    The OP has stated in one of her replies that it can't be transferred - she's looked at that route already...
  • Spies
    Spies Posts: 2,264 Forumite
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    Spies said:
    You can transfer it into her name... 

    The OP has stated in one of her replies that it can't be transferred - she's looked at that route already...
    Looked through several times, maybe it's my tired eyes but I can't see that stated. 

    You can switch ownership without having to end the contract, only issue is she would ironically be subject to a credit check... 
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  • cymruchris
    cymruchris Posts: 5,558 Forumite
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    There is also another way she can get some more positive history - and it's something that absolutely helped me - and I always recommend it - but there are sceptics here that think it's not worth doing. It doesn't suit everyone - but I think it's great for someone with little to no history. (After bankruptcy I managed to get one card with a £400 ish limit - a few years later I'm back to a wallet full of big name cards and a £40k+ limit - and I know it sprang boarded me forwards as it were.)

    It's called Loqbox - it's in effect a savings account but shows on your history as a loan. You don't actually get any money - but you agree on paper to borrow a certain amount which equates to £X a month over a year. You then make that payment by direct debit every month - and it reports to the credit agencies.

    At the end of the year - you have the option of opening a new current account (usually with the TSB) and the money gets transferred in - in full with no deductions - or you get the money paid back for a small admin fee. I'd go with the new account as it's adding to the history again. The 'loan' then shows as 'settled' - so that gives big plus points for any credit applied for beyond its completion.

    You set the agreed amount/monthly payment at the beginning - but you must NOT miss a payment - as it's just like a real loan - and you'd get penalised for it on your history. (Direct debit should mean no payment would ever get missed as long as there's funds available).
  • cymruchris
    cymruchris Posts: 5,558 Forumite
    Eighth Anniversary 1,000 Posts Name Dropper Photogenic
    Spies said:
    Spies said:
    You can transfer it into her name... 

    The OP has stated in one of her replies that it can't be transferred - she's looked at that route already...
    Looked through several times, maybe it's my tired eyes but I can't see that stated. 

    You can switch ownership without having to end the contract, only issue is she would ironically be subject to a credit check... 

    Sometimes replies in replies do tend to get lost - so info can be easily missed.

    I'm not sure why they won't swap it over - but the OP has said she's looked at this.


  • enthusiasticsaver
    enthusiasticsaver Posts: 16,041 Ambassador
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    edited 3 March 2024 at 11:20PM
    I think she should operate a current account and possibly take out a mobile phone contract in her own name before applying for a credit card. That is what I suggested both my daughters did.  They did not apply for their first credit card until they had a full time job after University when they were 21. 

    Is your daughter working full time?  If not then that will be why she was declined. 
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.

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  • enthusiasticsaver
    enthusiasticsaver Posts: 16,041 Ambassador
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    I have just read in one of the earlier posts she is only working part time and only earns £4k a year.  If I were her I would not apply until she has a full time job. 
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.

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  • Why not teach your daughter that her life will be happier and less stressful if she never borrows money for anything except a house? As others have said, you do not need a credit card to get a mortgage. Better to take debt off the table and be free.
  • cymruchris
    cymruchris Posts: 5,558 Forumite
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    Why not teach your daughter that her life will be happier and less stressful if she never borrows money for anything except a house? As others have said, you do not need a credit card to get a mortgage. Better to take debt off the table and be free.

    You're right - you don't NEED a credit card to get a mortgage - but if you want a wider choice of mortgages from a range of providers, and want the best possible deals, then it's better if you have a positive credit history. This can include many things - like being on the electoral roll, sim-only contracts and credit cards.

    Having a credit card, and learning that you spend then pay off in full each month is a good lesson to learn early on. Having a credit card brings longer term benefits, such as rewards and certain buying protections.

    Credit cards aren't a bad thing if managed correctly - and paid off in full monthly will help demonstrate a positive credit history, and allow someone more choice when the mortgage time comes.

    If you were lending money out in the hundreds of thousands - would you prefer to lend it someone that has no history, but says 'Hey I earn £50k a year - you can trust me!!' - or to someone that had a long, demonstratable track record of good credit management with several accounts on file? I know where I'd rather put my money....
  • fatbelly
    fatbelly Posts: 22,784 Forumite
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    edited 4 March 2024 at 11:37AM
    Tesco do a Foundation card and if you apply through quidco/topcashback you get cashback.*

    You also get clubcard points.

    I would give it a few months before applying but there's another mse lesson for her!

    *£25
  • kezzygirl
    kezzygirl Posts: 993 Forumite
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    Spies said:
    Why is the existing one not in her name? 
    Because she was 17, not old enough to have one
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