Building ones credit score..

Dmack

Dmack

Dmack

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Joined
20 Mar 2005
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1,375
Hello all hope you are enjoying your bank holiday weekend.

Some questions. I'm a recent graduate and i have just secured my first grad job and now have a decent wage coming in each month. Point of the thread is that i want to start building my credit score if that's possible ?

I'm told by people at work etc that the best way (and what they do) is to get a credit card and spend a certain amount each month and pay it off. Took this advice and applied for a credit card.

However i've only been in my job for a month and currently have an overdrawn student account that was an eye watering fail.

any advice ?
 
Sorry if i didn't make it clear, the application wasn't successful. The question was also does that method work. All in all i'm wondering if there's anything i shoud do, i.e getting a new account and getting my wages paid into that account instead so it's like starting from scratch, apply again next year when i've been in the job for longer. etc. Do these things help ?
 
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Stick with the bank you have, pay so much of your overdraft back as you earn, have the wages paid in directly.

How much is the overdraft?
 
Dmack said:
£1,000. Could pay it off but would prefer to do it gradually like you said.
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Do that then, go in there, say your salary is about to start going in, you want to pay X amount per month / week whatever.

Get used to a debit card first and running the account properly, then apply next year when you have a record of working for a while etc.

Dont keep applying in the mean time as that adversely affects your credit score.
 
I've only just managed to get a credit card from my own bank (Barclays, if it matters), who I've had an account with for 15 years, ~£10k in savings and ~£40k a year paid in for the last 2 years since graduating - I wouldn't be shocked if it takes you a while to get one.

Although interestingly, I was able to get an Amex as soon as I had a job offer whilst still being a student - I guess things have changed in the last 2 years though...
 
Just running a decent current account with an overdraft service available will show on your credit report.

Your credit report will show the account, it's overdraft limit, and how much of that limit is being used. Multiple monthly entries showing zero usage will increase the chances of creditors being comfortable offering you credit.

Repeated lists of you being near to your o/draft limit will mean creditors will take the view you can't take on any more lending.

Ref credit card - try people like Capital One & Vanquish (spelling? May be vanquis) as they do poor credit history cards. Punitive interest rates however if you pay it off every month it's irrelevant.
 
[TW]Fox;17264685 said:
If you applied for, and got, a credit card, whats the problem?
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not sure if i'm confused what's the point of this thread but even if tyou get a credit card doesn't mean problem solved. you also then need a good limit.

i was given the advice like the op to spend and then pay off each month as my limit was £500 and had been for 2 years and every application was denied. 2 years layer my limit is still £500 where as my partner who never pays off and always has money on credit card is curretnyl around £2.5k!

i also get no overdrafts with any of the 4 current accounts i have which is a pain as i go £1 in red i'm screwed but others who are always in red can go something like £250 and are fine until they pass that.

i'm yet to understand why this is.
 
Having an overdraft will actually have the same benefit as having a credit card - if it is managed correctly. The whole point of a credit score is that demonstrates how you manage your credit. So proper spending on a credit card is no more beneficial than properly managing an overdraft. I still have my student overdraft (it's interest free, why get rid of it?) yet I have a 999 credit score (the highest possible score).

Mobile phone contracts also boost your credit score - if you pay your bill on time.

It's worth getting a copy from experian, see what is causing them to decline you a credit card. Santander managed to decline me because they had incorrectly entered my address into their system so couldn't find my credit history the first time.

'Starting from scratch' will not work. I believe that if you close an account it stays on your report for 6 years whilst I believe if you leave it open bad marks only remain for 3. So you're best leaving open any badly managed accounts and get them into order.
 
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Get a vanquis credit card. Very High rate of APR so pay off straight away but they readily accept people with previous bad credit and is a great way to build your credit.
 
  • Get on the electroal register
  • Apply for a capital one credit card (they offer one for poor scores, but always pay it off as its like 30% APR)
  • If that fails try get one with your current bank - they are usually more favourable and will probably use an internal credit score.
Having an overdraft can be good - however my Lloyds one never shown on my reports so may not be working in your favour (or against)

Ensure that when you have credit/overdraft facilities you only use up around 60% of what is available to you before applying for further credit. In addition to this, you need to keep the total credit available to you in proportion to your salary.

Also don't try and apply for credit more than a few times in 6 months - Too many applications for credit will make it look like you're desperate. Other lenders can't see the outcomes of your applications - although sometimes this can work against you.

I'd also get a copy of your credit report from the big 3 - call credit, equifax and experian (paper only costs a few quid). I found out that Barclays had flagged me for late payment on my CC when this wasn't the case and that family members were showing on mine affecting my score, and had to file a notice of disassociation.
 
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