How to build credit file for 18 year old

cymruchris

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

cymruchris 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... 

cymruchris

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

Spies said:

cymruchris 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

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. 

enthusiasticsaver

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. 

inthezeroroom

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

inthezeroroom said:

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

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

Spies said:

Why is the existing one not in her name? 

Because she was 17, not old enough to have one