Card to build credit rating quickest

Hello folks, my first post so please go easy on me!

In 2014 I was a fraud victim with EE sending me a bill for a phone contract £299 that I had never requested nor got the phone for. I quickly reported to EE and after 3 months of being shuttled around their useless customer service, I stopped calling them as they would just say same thing - the investigation was going on.

Fast forward end of 2017 I get a letter from Lowell for a £2000 unpaid phone bill and threatening letters. Since I was innocent I argued with them, providing evidence that this was clearly not my debt, thinking I had watched enough Suits episodes to be my own legal counsel. Eventually I got a lawyer who wasted my time, and Lowell did some underhanded tactics like communicating to me at my new address but reporting my old address to the court so that I had no idea they had requested a response from me. Anyway long story short time ran out and to avoid a CCJ I ended up paying £2400 to Lowell which was very painful as it was not my debt. It came on my report for one month but as I paid during the notice period, it was taken off. I want to join forces in a class action lawsuit against the thieves that Lowell are but probably will never happen. I had worked very hard to save a mortgage deposit for my first home and it all came crashing down.

I need to now build my credit rating as it is rock bottom, so I can qualify for a mortgage. I have been a financially naive person (in case you haven't inferred it yet) and closed my only credit card years ago as I wasn't using it. I don't have any debt, have a reasonably alright salary for many years now, have reasonable savings for my mortgage deposit, single with no dependants. With my circumstances, which credit card would help me build my rating quickest? Is it a fantasy to think I could recover in the next 6 months? Any advice or thoughts to help me plan my next 12 months would be much appreciated.

I have shortlisted to Barclaycard initial and Tesco. I understand I should stay away from the Newday subprime lenders like Aqua etc? Of course this is assuming I am not rejected by Barclays or Tesco. Should I go for one over the other? Or am I missing a trick altogether?

Thanks!

Comments

  • All cards will provide you with the opportunity to build credit history equally. You spend, then pay in full. All cards offer this functionality.

    6 months will be better than nothing but lenders will view your file as a whole..

    No reason to avoid aqua. You will find it easier to get, given your existing history.
  • Thanks zx81, are there some cards which will increase the credit limit quicker, so I can spend and pay in larger amounts and thereby improve my rating faster? I'm assuming the more activity there is on my card the better for my credit rating.
  • A large limit isn't necessary - just put regular spend on it and clear in full. The amount is fairly irrelevant.

    Having said that, Barclaycard will offer the best long term potential, as they have a wider portfolio.

    Also worth pointing out that the credit rating you need to improve isn't any of the pretend ones from the CRAs. Lenders will always score you against their criteria, which isn't reflected the CRA gimmick scores. So don't worry when it drops - or rises.
  • Anthorn
    Anthorn Posts: 4,362
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    I'll go further: All credit will build a credit history, not just cards. However it has to be credit which is reported to the CRAs. In terms of building a credit history any accounts which are not reported to the CRAs are an utter and complete waste of time.

    Credit card, J.D. Williams catalogue, ID Mobile (Carphone Warehouse) monthly SIM only.

    How quickly a credit history will build is dependent on the lender who is viewing it. It's eye of the beholder stuff. I really don't think you will be entering the mortgage market anytime soon!

    Looking back to when I had to rebuild my credit history, it was two years before it started to have an effect and a full six years before I began to see prime credit cards and loans. I started with Vanquis because that was the only card I could get and progressed to Aqua and from there to Creation and then to MBNA and Lloyds Bank credit card. Right now I have my American Express green card which I am very proud of achieving although Amex appears to have dropped its standards these days.
  • I'm not so sure you should've paid off the debt, particularly if you claim it was fraudulent... but that's in the past now.

    As has been said, any credit which reports to your files will assist in building your credit history. Lenders do not see the names of the actual cards, so there is no reason to avoid sub-prime cards - in fact you should probably do the opposite, and given your situation, apply for one or two over a period of a few months. Another option would be to have a chat with your bank, and see what/.if they can could offer you a card.

    Just make your normal monthly purchases on the card, and make sure to pay it off in full every month (setting up a DD to make this happen is the easiest way to never forget). Give it some time - it'll probably be 12-24 months before you start to be eligible for better cards, and probably a bit longer until you can get a better mortgage deal, but every lender is different.

    Also the usual caveat to ignore the credit scores generated by the three CRAs. Every lender generates their own internal score based on the contents of your file, so what matter most is your credit HISTORY, not the score (which no-one else but you sees, and contrary to popular opinion does not correlate to any sort of ability to get good credit).
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