Building A Credit History From Scratch
Comments
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sashforth9 wrote: »TIP of the day. DO NOT GO WITH LOQBOX - Its a con. It all depends on how good your creditworthiness is. If you have poor credit anything under a score of 550 DO NOT DO THIS. I saved for 12 months only to be told at the end if I want to redeem the money I had saved there would be a charge. I only saved £20 a month totaling 240 only to be £30 down when I came to redeem it.
I agree they do tell the credit reference agency, you have paid the loan back in full. But if you want to reclaim ALL the money-back you have saved they get you to open up one of their sponsored bank accounts for them to pay the money in to. The problem is UPON OPENING a NEW bank account, that bank carries out a hard search on your credit file to see if YOUR CREDIT WORTHY thus damaging your credit file if not WORSE when you started to save with LOQBOX. There is a far better way to improve your credit and this company is defiantly NOT I repeat NOT one of them..!!!!
Your credit score is meaningless.
You could have saved yourself £30 by opening the account they wanted you to open, withdrawing the money and then closing it.1 -
I went through the same process when I first moved to the UK. I echo the comments above about not bothering with LOQBOX or similar "credit building" services. Everything they do you can do yourself for free.
Make sure to register on the ER at your current address. Open a bank account if you can (you might struggle with anything other than a "basic" account at first). It'll probably take a while but after a few months it'd be worthwhile trying for a sub-prime card. Use an eligibility checker to see what might be available to you. I got my first card after 9 months in the UK, but your experience may vary. Get access to your credit files from all 3 CRAs (Experian, Equifax and TransUnion) - you will have to jump through some hoops to verify your identity but it's relatively straightforward.
A problem I found was that many providers require 3 years address history in the UK to apply for their products. Some lenders don't strictly require it, but their application forms are not set up to accommodate it (they won't let you write in foreign postcodes hence the forms are effectively unable to be completed). The LUMA card from Capital One was the first lender I had success with in case it helps. Otherwise any sub-prime card will do.0 -
What exactly are credit builder loans? Never heard of them. I really hope you didn't take out payday loans.
Credit builder loans are products such as Credit Improver and Cashplus advance, where you pay 5-10 GBP a month just to basically build history. Loqbox is far better, because it's 30 GBP a year, and only if you decide not to move those funds to one of their sponsors.Your cholesterol levels are not seen, or used, by your heart and arteries, so ignore it.
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Oh I understand.Credit builder loans are products such as Credit Improver and Cashplus advance, where you pay 5-10 GBP a month just to basically build history. Loqbox is far better, because it's 30 GBP a year, and only if you decide not to move those funds to one of their sponsors.
As far as the Cashplus credit builder is concerned I would actually agree that, under certain very specific circumstances, this can be beneficial but not for the reason that you may imply. The circumstances under which I believe it could be beneficial is where an individual has no credit whatsoever, does not exist as far as credit is concerned. As this will be reported to the CRA;s it will bring an otherwise blank credit file into existance. However, the amount of the loan is so small that it will have no effect on lenders decisions and I would imagine it would be immediately obvious to any potential lender what it was. One such loan would be sufficient. I can see no reason for multiple loans of this nature.
Your comment above is contradictory. You say that the Cashplus loan is £5-10 per-month and then say that the loqbox is only £30- a year. But what you don't say is that the Cashplus loan represents a fee for a prepaid cad which the person taking out the loan will presumably use and would be paying anyway as presumably they have no bank account and need the Cashplus prepaid card while the £30 loqbox amount is their charge for giving you your money back and the actual amount that you will have to pay each month will be significantly higher and that loqbox will keep whatever you are paying each month for a whole year, will not pay you any interest and will then either charge you £30 to get it back or force you to open an account of their choosing.0 -
The circumstances under which I believe it could be beneficial is where an individual has no credit whatsoever, does not exist as far as credit is concerned. As this will be reported to the CRA;s it will bring an otherwise blank credit file into existance.
Which was exactly the situation I was in, and the OP's as well.Your cholesterol levels are not seen, or used, by your heart and arteries, so ignore it.
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On that basis, I would have thought that having utility accounts recorded on a credit file would also be useful in building a credit file, for someone who is new to the country.Which was exactly the situation I was in, and the OP's as well.I work within the voluntary sector, supporting vulnerable people to rebuild their lives.
I love my job
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Yes definately.Willing2Learn wrote: »On that basis, I would have thought that having utility accounts recorded on a credit file would also be useful in building a credit file, for someone who is new to the country.0 -
Willing2Learn wrote: »On that basis, I would have thought that having utility accounts recorded on a credit file would also be useful in building a credit file, for someone who is new to the country.
See, the problem is, many utilities require some credit history or they turn you down. The beginnings are hard! I was lucky enough that I got a job offer when I was still living abroad and the offer came with a package that ensured I'd get a current account set up via my employer's business relationship with a bank. But not everybody is so lucky... I've had friends who relocated here without a job offer and had to start with a basic account, no utilities, PAYG SIMs, etc. It can be hard, and depressing.Your cholesterol levels are not seen, or used, by your heart and arteries, so ignore it.
:eek:.0 -
Hi, one question about rental exchange. Did you ask the landlord to report the payments or did you self-report? As it seems to be an option. Asking as I believe people wouldn't want to involve landlords in it in any way.gionnetto said:Can anyone else recommend anything I can be doing short term to help? I realise it is going to take time (realistically I am thinking 12 months + before I even apply for a mobile phone contract or credit card etc.)
I relocated to the UK a little over 2.5 years ago. Here's what I did after getting a current account with BOFI:
1) joined the ER
2) joined the rental exchange (but I'm assuming you aren't renting, so this might not apply to you)
3) I got a couple of "credit builder" (very) small loans - JUST to build history
4) one year later, I got a credit card - which I used sparingly but regularly and paid it off each month
5) another year later, I got a 0% purchases credit card, another current account and a SIM only mobile plan
6) even if they don't build credit history, don't forget to get a regular saver and an instant savings account.
My next targets are a cashback credit card and/or one for travelling - don't know in what order yet.
Life is good.0 -
almanak said:
Hi, one question about rental exchange. Did you ask the landlord to report the payments or did you self-report? As it seems to be an option. Asking as I believe people wouldn't want to involve landlords in it in any way.gionnetto said:Can anyone else recommend anything I can be doing short term to help? I realise it is going to take time (realistically I am thinking 12 months + before I even apply for a mobile phone contract or credit card etc.)
I relocated to the UK a little over 2.5 years ago. Here's what I did after getting a current account with BOFI:
1) joined the ER
2) joined the rental exchange (but I'm assuming you aren't renting, so this might not apply to you)
3) I got a couple of "credit builder" (very) small loans - JUST to build history
4) one year later, I got a credit card - which I used sparingly but regularly and paid it off each month
5) another year later, I got a 0% purchases credit card, another current account and a SIM only mobile plan
6) even if they don't build credit history, don't forget to get a regular saver and an instant savings account.
My next targets are a cashback credit card and/or one for travelling - don't know in what order yet.
Life is good.
Should really have started your own thread, the poster you quoted hasn't been back since last year.0
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