Best way to create a good credit rating?

Skeeter

Skeeter

Skeeter

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My GF recently had a credit card application declined, which we thought was odd as she has never had any debt or been in any financial trouble.

But then we figured that is probably the reason. Shes 25, and other than a Student Loan she's never had any credit on anything. No loans, no credit cards, no store cards. So possibly the lack of a credit rating is why the CC was declined?

What is the best way to build a good credit rating? At some point in the future we will be buying a house so any improvements we can make to her credit rating before then will help. Taking out a credit card and paying it off each month seems out of the window as she can't get a CC in the first place.
 
Skeeter said:
But won't that potentially record a number of declined CCs on her credit rating?
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Good point. Credit cards are the best way of upping credit rating that I know of, sure people who have been in her shoes will be able to tell you more though. What do places like MSE say?
 
Mobile phone contract will go towards your credit rating too.

And as above, maybe a less discerning higher interest rate credit card maybe more forthcoming. As long as you pay it off every month the interest rate is irrelevant and will help build a rating too.

Though be slightly careful, as a flurry of credit applications (esp if declined) will probably go against you even more.
 
Get a credit builder card of sorts. Something with horrible APR and use that. My first card was a Barclaycard Initial.
 
Paying Bills that are in here name. Mobile contracts, water bill, electric bill etc. Mobile phone companies will have different levels for accepting people T mobile used to be the easiest back in the day.

Most store cards for places like argos automatic accept people but store cards are bad.

Jump on moneysupermarket and apply for a credit card for people with bad credit. Use this to purchase a few items and pay them off. Normal just use it to purchase things you would have normally but pay them off don't use them as if its your money it is.

Also sign up to noodles for a free credit check to see what her current rating is. This will help you determine if it was just a lender that has a higher standard for lending or if you misses has something on her credit record from the past she has forgotten about. Like missed payments etc.


That's about all the advise I have to be honest. Just remember that credit cards are bad if they are abused so try your best not to use them :p
 
if you apply to loads of credit products in a short period of time it can lower your rating also.

its maybe she just has not got a history.
 
Try taking out a small loan and paying that back as per the terms. £1000 over 12 months for example. I don't know how different it will be in the UK, but in Ireland, especially if you are planning on trying to get a mortgage, avoiding credit cards would be a good start. Ensuring you current account was in good order, little or no overdraft (at least make sure you account returns to a positive balance after every wage payment), history of making payments on personal loans, no online betting accounts etc.

Anyway, I'd be avoiding a credit card if the ultimate goal is getting a mortgage.
 
Would be worth checking her credit file to ensure she's not been a victim of fraud or anything. But more than likely it's due to the lack of credit type products that was the reason for the refusal.

Check out MSE for a list of providers for applicants with poor or no credit rating. Bear in mind these cards will be terrible, low limit and very high APR. So as long as you're paying the balance off in full each month, then they won't be an issue. This should quickly raise your credit limit to something more acceptable for better offers on cards etc.
 
Brian18741 said:
Try taking out a small loan and paying that back as per the terms. £1000 over 12 months for example. I don't know how different it will be in the UK, but in Ireland, especially if you are planning on trying to get a mortgage, avoiding credit cards would be a good start. Ensuring you current account was in good order, little or no overdraft (at least make sure you account returns to a positive balance after every wage payment), history of making payments on personal loans, no online betting accounts etc.

Anyway, I'd be avoiding a credit card if the ultimate goal is getting a mortgage.
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Why? :confused:

As long as you pay off the full balance each month then this won't cost them anything extra. If anything she'd likely struggle to get any form of interest free loan which means your idea will likely cost them more money.
 
Skeeter said:
Just signed up for myself and all it says is "3/5".

Which means nothing. Seems to get any meaningful information you still have to pay.
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Equifax and Experian are always doing 30 day free trials. Bear in mind though that you have to phone up to cancel your trial, and being sales people they're quite pushy at asking you to extend, or choose their other products. As long as your firm with them then they should close without any issues.
 
This is a can of worms.

I've got a very good credit score, 975 out of 1000 and I get declined for cards ( "We regret to inform you that on this occasion you do not fit our current customer classification. However, based on your application we have guaranteed you a card with our sister company on a respectable interest rate of 48.5% APR").

There is impetus for card companies to be 'responsible lenders', but they are essentially out to make profit. I believe that most are actually after someone who has a bad history so they can charge them exorbitant fees either on missed payments, or on very high interest rates (profits).
 
RedvGreen said:
This is a can of worms.

I've got a very good credit score, 975 out of 1000 and I get declined for cards ( "We regret to inform you that on this occasion you do not fit our current customer classification. However, based on your application we have guaranteed you a card with our sister company on a respectable interest rate of 48.5% APR").

There is impetus for card companies to be 'responsible lenders', but they are essentially out to make profit. I believe that most are actually after someone who has a bad history so they can charge them exorbitant fees either on missed payments, or on very high interest rates (profits).
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Yes this can also be an issue with having a very good credit rating. Unfortunately lenders need to make money, and if you're a candidate who always pays off credit without issues, then a lender will never make any money out of you, which is bad business for them.
 
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