How to build credit file for 18 year old

kezzygirl

cymruchris said:

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.

Declined for tesco foundation:(  might give it a few months before looking at credit cards, currently they're not having any of it lol 

kezzygirl

born_again said:

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. 👍

Ved? What's that?

Spies

Car tax basically 

lr1277

Some credit cards have minimum income requirement. I googled:
tesco foundation card minimum income required.
Google came back with a few results. Apparently the minimum income for the foundation card is £5k. Though I didn’t investigate further. Perhaps worth googling
[card name] minimum income required 

before making the next application?

Edited to add:Out of curiosity I googled Vanquis credit card minimum income required.

Whiilst no figures was given, this page was returned:

https://www.vanquis.co.uk/credit-cards/low-income-credit-cards

daveyjp

No need for a CC yet.  Let her get into full time employment, receive regular income, set up a couple of direct debits and her credit rating will build nicely.

enthusiasticsaver

I strongly recommend she does not apply for any more credit cards as the declines will go against her. She won't be in a position to apply for mortgages for quite a few years yet so there is no rush to build up credit score. Let her focus on managing money first by budgeting and being sensible with her savings and repaying you for the car expenses.  

Stuart_W

Once on the electoral role, if there is no joy with credit cards often a home shopping credit account with Very or Littlewoods are quite easy to be approved for with limited income - the initial opening offer, usually 20% off or £10 discount or something can make the initial one-off purchase a more realistic price, just buy some socks or something and pay off at the interest free rate. That might pave the way for getting approved for a credit card further down the road.
Just don't be conned by any of the pay-for credit builder options - these are not worth it. And the APR on any credit card is irrelavent if being paid in full. Just never withdraw cash and never miss a payment. 

cymruchris

Stuart_W said:

Once on the electoral role, if there is no joy with credit cards often a home shopping credit account with Very or Littlewoods are quite easy to be approved for with limited income - the initial opening offer, usually 20% off or £10 discount or something can make the initial one-off purchase a more realistic price, just buy some socks or something and pay off at the interest free rate. That might pave the way for getting approved for a credit card further down the road.
Just don't be conned by any of the pay-for credit builder options - these are not worth it. And the APR on any credit card is irrelavent if being paid in full. Just never withdraw cash and never miss a payment. 

Good call on the 'Very' account - use it - pay in full as you say - that'll show an 'active' account on the history.

theoretica

My understanding is that it is particularly important to avoid any slip-ups and late or missed payments (which aren't a possibility when you have no credit accounts).  A negative can do harm to her credit record in one lump, while it takes lots of consistent positives to add up and improve it. 

Will she be going to University?  She may be able to get both credit card and student current account from the same bank.

cymruchris

theoretica said:

My understanding is that it is particularly important to avoid any slip-ups and late or missed payments (which aren't a possibility when you have no credit accounts).  A negative can do harm to her credit record in one lump, while it takes lots of consistent positives to add up and improve it. 

Will she be going to University?  She may be able to get both credit card and student current account from the same bank.

Yes - a good point to emphasise that in doing this positive history building activity - one slip up of a missed payment could cause more damage than good - and although the effect would fade away over time, it would still be a black mark on the record - so hopefully your discussions will make sure she's clear that under no circumstances can she miss a payment on anything.