18 year old requiring a bit of advice.

dannodw

Hello all,

I recently turned 18 and was advised by my parents to apply for a credit card to get my credit score up, 'climbing the ladder' as they called it.

Now i am a full time Student current doing my A levels, I have a annual income of around £2500, not much but studying comes first.

I will be hopefully attending university latter this year.

After some research i decided on applying for the Capital One Classic card. They stated a decision in '1 minute', mine simply stated they would contact me after reviewing my application.

After reading these forums, before the application i ensured i was on the Electoral Role, which i am.

Now obviously being 18 i don't have any credit. I have been with my current bank for 7 years and have a balance of around £5000. I try to spend very little so this doesn't fluctuate that much.

For the past year i have had a direct debit of £110 per month coming out of my bank account, for my car insurance. Would this increase my credit score at all?

You may be thinking why do i want to burden myself with a credit card, especially one with a 35% interest rate. Well it is simply to establish credit. I would most likely use it for fuel, a fill up every 3-4 weeks, i would of course pay off my balance in full, avoiding that interest rate.

Just wanted some assurance that i had done everything correct, and possibly some more advice on how i could improve my current predicament of not having a credit rating.

Thank you all in advance,

Dan.

[Deleted User]

Don't get hung up on credit scores. It's only a value that lets banks know how good you are for money loaning purposes. Think of it as a 'debt' score instead.

Go to uni, do well, get a decent job, avoid debt, make sure you pay bills when you've got them - then you'll end up with a decent credit rating.

gt94sss2

dannodw wrote: »

Just wanted some assurance that i had done everything correct, and possibly some more advice on how i could improve my current predicament of not having a credit rating.

While you haven't done anything wrong, don't worry if Capital One accept or reject you for a card.

Once you go to university open a 'student' account with one of the big banks - they will be quite happy to give you a credit card at the same time..

The only other real way to build up a crdeit history in the meantime is if you have a mobile phone on a contract - rather than a PAYG one.. but its not worth getting one just to build up your credit record!

Regards
Sunil

puppet1984

as stated above when your account reverts to a student account (if your staying with your current bank) they will be more than happy to offer you a card.
some quick advice as you seem to be wanting to not get into debt.
If they give you a high limit lower it to something manageable.
set up a direct debit to pay in full each month.

jonesMUFCforever

I wonder if your parents have credit card debts and loans etc as I cannot believe any sane person would advise their kids to do what was posted on post #1.

CannyJock

jonesMUFCforever wrote: »

I wonder if your parents have credit card debts and loans etc as I cannot believe any sane person would advise their kids to do what was posted on post #1.

Impossible to go through life without some form of credit, even if it's only your utility bills, mobile phone bills etc.

If more parents taught their kids about responsible debt management and explained the difference between good and bad debt then maybe we wouldn't have to endure celebrities advertising debt consolidation and people wouldn't get ripped off paying crazy interest rates?

To the OP, I'd say that if they've taken the time to do the research and learn about the rules of the money game then they're off to a much better start than most of us. Took me years to learn how to use the money game to my advantage and not before it'd cost me a few expensive lessons along the way.

mrme

My brother got an Egg card @ 18, a sensible £500 limit was offred and £35 Quidco cashback was a bonus. As long as you understand the importance of keeping up with payments and not going over your limit (which it sounds like you do ) getting a card now would be beneficial. Don't be annoyed if you are turned down though as its hard to get credit at the moment and you will be seen as a high risk customer.

emma396

why dont u ask your bank for a cc? they can usually see on screen whether u r eligible or not.

Martinslovechild

It's extremely important that you stick by the rule of always paying it off. The book 'Maxed Out' includes a chapter which discusses the promotion of credit cards to University students and it really doesn't make for happy reading...

By the way, it would be worth your while requesting a copy of your credit report from one of the 3 agencies who compile this data, Experian, Equifax & CallCredit. On each of their respective websites, you can request a copy of your statutory credit report - it costs £2. Don't be tempted to sign up for the far more costly reports - there's no requirement to do this over and above the £2 report.

dannodw

Thanks for all the advice and comments.

I suppose i am lucky, being brought up to value money and all aspects of finance.

Getting a credit card certainly isn't my top priority. My sole aim was to gain a better credit rating.

Thanks again,

Dan.

marshall2k

@jonesMUFCforever

What is wrong with someone using a credit card and paying it off in full every month?