How to build credit file for 18 year old

kezzygirl

Spies said:

You can transfer it into her name... 

Can't, they don't allow it. I've checked

kezzygirl

cymruchris said:

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).

I did see that, this could be a good option but she would have to pay them about £5 a month for the privilege. I have opened her an adult account with santander, we will see if they can give her a £50 overdraft or something. 

kezzygirl

enthusiasticsaver said:

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. 

She is working part time currently, and is full time at college, due to complete her a levels in June. She will then be looking for a full time position, which quite possibly will help!

kezzygirl

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.

She will be free to a certain extent, but her options for a mortgage will be better if she has some credit history. I've educated her about debt and just wanting to start off on the right foot for her by building a good credit history.

kezzygirl

fatbelly said:

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

Il look into this, thankyou. Is it for first timers? 

kezzygirl

UPDATE: Thankyou for all of your replies. We have had an eventful day. Firstly we visited the bank to close her trust fund and withdraw the £3200 she/we have saved for her since her birth. Quite a nice feeling knowing she has a little cash to get her started as myself and my husband have never been given anything. They gave her a cheque and she's paid it straight into her bank account. 

She has applied for an adult basic account with santander to transfer from her mini123 account. 
She is on the electoral role already.
We've opened a LISA on moneybox and she has set up a direct debit for £20 a month to pay in, aswell as paying in probably £2800 from her trust fund. Initially she was going to pay it all in the lisa, but thinking about it it would be good for her to have about £500 cash savings as she is running a car. 
We opened a virgin savings account at 5% Interest, so the £500 will go in there with also a little extra from her wage. 
She does owe us just over 3k to repay her car and insurance we bought for her, which she is repaying monthly. 

All in all, a good start and makes me feel good she is getting sorted on beginning adult life

cymruchris

kezzygirl said:

cymruchris said:

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).

I did see that, this could be a good option but she would have to pay them about £5 a month for the privilege. I have opened her an adult account with santander, we will see if they can give her a £50 overdraft or something. 

With Loqbox you don't pay anything for the privelege - it's purely like a savings account - you get your full money back in the end depsosited into a new current account (Usually the TSB).

There are other products that offer a service at £5/10 a month etc - they're different providers - and I wouldn't ever recommend 'paying' to get a better credit history when you can take steps like the ones we've outlined for free.

cymruchris

kezzygirl said:

UPDATE: Thankyou for all of your replies. We have had an eventful day. Firstly we visited the bank to close her trust fund and withdraw the £3200 she/we have saved for her since her birth. Quite a nice feeling knowing she has a little cash to get her started as myself and my husband have never been given anything. They gave her a cheque and she's paid it straight into her bank account. 

She has applied for an adult basic account with santander to transfer from her mini123 account. 
She is on the electoral role already.
We've opened a LISA on moneybox and she has set up a direct debit for £20 a month to pay in, aswell as paying in probably £2800 from her trust fund. Initially she was going to pay it all in the lisa, but thinking about it it would be good for her to have about £500 cash savings as she is running a car. 
We opened a virgin savings account at 5% Interest, so the £500 will go in there with also a little extra from her wage. 
She does owe us just over 3k to repay her car and insurance we bought for her, which she is repaying monthly. 

All in all, a good start and makes me feel good she is getting sorted on beginning adult life

Off to a good start - although the CRA's don't see savings accounts or levels of savings - it's good to instill the behaviours now!  Once that Santander account shows - that'll help with the history side of things - and the electoral roll is another positive step.

cymruchris

kezzygirl said:

fatbelly said:

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

Il look into this, thankyou. Is it for first timers? 

If she runs the eligibility checks on the Tesco credit card website - it'll give an indication of success. Usually the Tesco foundation and the Barclaycard forward tend to be for people with at least a little history. I usually see them as the next step beyond the credit builders from Aqua, Vanquis and Capital One.

born_again

kezzygirl said:

UPDATE: Thankyou for all of your replies. We have had an eventful day. Firstly we visited the bank to close her trust fund and withdraw the £3200 she/we have saved for her since her birth. Quite a nice feeling knowing she has a little cash to get her started as myself and my husband have never been given anything. They gave her a cheque and she's paid it straight into her bank account. 

She has applied for an adult basic account with santander to transfer from her mini123 account. 
She is on the electoral role already.
We've opened a LISA on moneybox and she has set up a direct debit for £20 a month to pay in, aswell as paying in probably £2800 from her trust fund. Initially she was going to pay it all in the lisa, but thinking about it it would be good for her to have about £500 cash savings as she is running a car. 
We opened a virgin savings account at 5% Interest, so the £500 will go in there with also a little extra from her wage. 
She does owe us just over 3k to repay her car and insurance we bought for her, which she is repaying monthly. 

All in all, a good start and makes me feel good she is getting sorted on beginning adult life

VED on a monthly DD from her account.
Ins going forward from her account. 👍