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Credit card or Phone contract best option for me
Options
I need to get a loan around £10,000 at my bank in September - October. Need it really bad so I am kind of desperate for some detailed advice. Despite that I've been with the same bank for over 10 years, my credit score states 'excellent' on Experian and I've been with the same employer full time for 4 months (and will be 6 months in September), my bank not showing me any potential loans as available on their app. I heard that this might be because I have no history of borrowing with them. There is an option to apply for a credit card Representative 33.9 APR variable. I never used a credit card in my life so not sure how to use it. (If use it and spend some money just to show I use it and then put money back on it will it charge me 33.9%?) Also there is another option for me is to get a mobile phone contract which I also have never had yet. Would two months of having either credit card or a mobile phone contract increase my chances? Which option would be better for me to boost my chances of securing a loan with my bank?
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If you get a card, spend on it and set up a direct debit to pay in full each month you won't pay interest at all. It's a good way to build up a credit history. It may take a couple of months for this to show on your credit history depending on how frequently the bank updates to Experian etc.
Phone contract for what? A monthly sim (EE costs about £8) is good, using it to buy a phone as well can be over the top expensive. Use your new CC to buy a cheap phone and get a monthly contract and sim to use that phone.
Credit score isn't looked at by a bank. Your bank will be able to see how you use your money, overdraft etc which will be more important.
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Assets said:I need to get a loan around £10,000 at my bank in September - October. Need it really bad so I am kind of desperate for some detailed advice.Assets said:Despite that I've been with the same bank for over 10 years, my credit score states 'excellent' on Experian and I've been with the same employer full time for 4 months (and will be 6 months in September), my bank not showing me any potential loans as available on their app.Assets said:I heard that this might be because I have no history of borrowing with them.Assets said:There is an option to apply for a credit card Representative 33.9 APR variable. I never used a credit card in my life so not sure how to use it. (If use it and spend some money just to show I use it and then put money back on it will it charge me 33.9%?)Assets said:Also there is another option for me is to get a mobile phone contract which I also have never had yet.Assets said:Would two months of having either credit card or a mobile phone contract increase my chances? Which option would be better for me to boost my chances of securing a loan with my bank?
How old are you, do you rent, live with parents, what do you earn and how much of what you earn is left over at the end of each month? You could be in a situation where you not only lack a suitable credit history, but also fail on affordability.
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OPs previous thread on same thing for reference best options for a newly employed — MoneySavingExpert Forum"You've been reading SOS when it's just your clock reading 5:05 "2
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Rather than just looking on app.
Try talking to bank about loan. Would make far more sense, as they will run through what they might be able to offer.
CC or Mobile contract is only going to affect your available credit & could have a negative effect on loan application.Life in the slow lane1 -
Assets said:Would two months of having either credit card or a mobile phone contract increase my chances? Which option would be better for me to boost my chances of securing a loan with my bank?If the main issue is your lack of credit history then a mobile phone contract will go some way to starting to build a history. However, unless you actually need a contract, it would be foolish to spend money unnecessarily simply to build up history.Correct use of a credit card is often the simplest way of building history - use it regularly for planned, budgeted purchases, wait for the statement to arrive then always pay the full balance, every month, without fail. This will cost you absolutely nothing, and will gradually start to build up a favourable history.However, the major issue you're going to face is lack of time. Two month's worth of history, whilst a good start, will make next to no difference in itself to how a lender views you. You'd need to have at least 12 months, probably more, before it made any real difference.I think born_again has given some really good advice there. Whilst doing these things online is undoubtedly convenient, sometimes the old-fashioned method of actually speaking to someone can be the best option.
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born_again said:Rather than just looking on app.
Try talking to bank about loan. Would make far more sense, as they will run through what they might be able to offer.
CC or Mobile contract is only going to affect your available credit & could have a negative effect on loan application.
Whenever I try speaking to my bank's customer advisorsthey just point at my app saying if you are not offered any loans on the app that means there is no loan. So you think it is best for me to avoid a credit card now. Are there any options for me at all to borrow money? I saw some websites like little loans allegedly they for people with bad credit history but they are offering huge amount of comission which if I sign up for repaying will be simply unaffordable for me. I don't trust them but just feel desperate.0 -
No new borrowing now will help improve your credit record for at least 3, probably 6 months. And in the short term it will harm it.
Little Loans representative interest rate is over 70% - that is mad for a large loan.
Have you used MSE's "soft search" checker? Worth trying: https://www.moneysavingexpert.com/eligibility/loans-calculator/search/
What do you want this loan for? You may need to find other ways round the problem and unless you say what the need is, we can't suggest any.0 -
ManyWays said:No new borrowing now will help improve your credit record for at least 3, probably 6 months. And in the short term it will harm it.
Little Loans representative interest rate is over 70% - that is mad for a large loan.
Have you used MSE's "soft search" checker? Worth trying: https://www.moneysavingexpert.com/eligibility/loans-calculator/search/
What do you want this loan for? You may need to find other ways round the problem and unless you say what the need is, we can't suggest any.
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