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How to start credit rating from scratch

Hello all!

I'm 26 years old and have just returned from living in Australia for 7 years. I have been back for 3 weeks and have gotten a pretty great paying full time job and have already got a new flat that I'm moving into in 3 weeks.

My question is, I don't have a credit rating at all because I haven't been here in 7 years. What can I do to start building it? I have opened my bank account and my wages will be going into that, but I'm looking to settle down now and I want to buy a house in a couple of years time.

Comments

  • Don't worry about ratings. Do you appear on the three CRAs - ie do you have credit files, with Experian, Equifax and Call Credit?

    Once you've established you're on there (raise a query if you're not), try to get a credit card. You're probably looking at a sub prime card, or perhaps one from your bank.

    Use it regularly, clear it in full each month. This will start to build history.

    Also make sure you're on the ER.
  • System
    System Posts: 178,077
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    Credit scores aren't used by lenders in the UK. You need to build credit history so this can be things like getting a mobile phone on contract and applying for a credit building credit card - don't worry about the APR on it as you should be paying it off in full every month so would pay no interest.
  • jaystuo wrote: »
    I have opened my bank account

    This is the point at which most people's report gets created - often as a student opening their first student bank account.

    I'd apply for a credit card with the same bank, use it and pay it back every month.
  • Get a credit card and just use it each month for something small, say a magazine subscription & always pay it back on time & in full.

    Make sure you're on the electoral register.

    Get a few things on finance and pay them back on time.

    You should be ok to apply for a mortgage after 3 years of doing this :)
  • Fireflyaway
    Fireflyaway Posts: 2,766
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    My husband was in this situation but things soon improved. Register on the electoral register, don't go overdrawn or allow and direct debits to be returned unpaid. Do this for a few months, then apply for a credit card -
    probably with your bank as they will see your good track record. Once you have that, pay it in full every month, don't use more than 30-40% of the available credit on it and never withdraw cash on it. Don't take out any payday loans or scorecards either.
    We bought our first house 3 years after my husband came to the UK.
  • Dobbibill
    Dobbibill Posts: 4,133
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    don't get finance - you probably won't be eligible for anything decent anyway - but you don't need to pay unnecessarily.
    Narkynewt wrote: »
    Get a few things on finance and pay them back on time.

    - Your bank account should report to the CRAs, so as others have said - don't use an overdraft, make sure any direct debits are paid on time.
    - Consider a second bank account - this helps with budgeting as well (bills/spending).
    - Make sure you are on the ER.
    - a SIM only contract (unless you save money by having a PAYG)
    - after a few months, try for a credit card - there's an eligibility checker here (use for groceries/fuel etc and pay off in full and on time every month)
    - a year later, consider a second credit card (use as above, paying off in full)
    - make sure your address has consistent formatting across all applications/accounts
    - some utilities will report to the CRAs.

    Check all 3 CRAs FREE.
    Clearscore (provided by Equifax)
    Noddle (provided by Call Credit)
    MSE Credit Club (provided by Experian)

    Ignore the scores they generate though - lenders don't use it ;)
    I’m a Forum Ambassador and I support the Forum Team on the Budgeting & Bank Accounts, Credit Cards, Credit File & Ratings and Energy boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.

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