How do credit checks/histories work in the UK?
What Martin Lewis has to say on the subject. You will need a credit history eventually, unless you’re planning to live off the grid – it’s not just used for loans, but also for rental applications and utilities accounts; you’ve already started with the phone contract. I recommend getting the credit card and using it for emergencies only if you don’t yet have a regular income (I got my first as a student in case my specs broke), but if this isn’t the case then using it for most purchases and paying it off in full each month is a great start. This is the perfect time for you to start learning responsibility with your finances – think about all of the things you’re going to need in the not-too-distant future, setting up a home and starting your career. Credit cards give you broader options for purchasing and greater protection, through chargeback and the Distance Selling Regs, and make planning for major pur
First of all I don’t know about differences between the US and the UK, but considering the same companies are involved I assume my advice will apply. I assume she’s talking about building up my credit rating so I can get loans more easily The other factor is that rate at which you will get loans. People with excellent credit ratings will get lower rates than people with average credit ratings, which in the case of large loans such as mortgages could add up large amounts of money. Is having a credit card and not using it (I’m terrified of spending money I don’t have) really better for me than not having a credit card AND not having and debts? Yes. On a practical level, having a credit card and not using it shows that you can handle the responsibility of having credit without overspending. On a technical level, having an unused credit card builds up months of bills marked “Paid” (it doesn’t matter that you owed nothing, the credit agencies only really care about Paid/Late/Unpaid). It als
You can sign up for a 30 day free trial at Credit Expert, which is run by Experian. You can see your credit report for free in those 30 days, but you have to pay for your credit score (£5.95, I think). If you don’t want to pay the monthly subscription, make sure you cancel before the trial is up. You need a good credit score in order to get credit – and without a credit history, your credit score will be poor, even though you have no debt. I would say, so long as you pay your credit card off each month, you’re better having one than not, as it will add to your credit history, and improve your credit score. Also, if you’re still a student, you’ll probably have an easier time getting a student credit card without much credit history, than you would getting a card with equivalent rates in the real world.
Very easily googleable. Experian and Equifax are the two big credit rating agencies in the UK. If you have never used any credit at all (not even an overdraft), then you will essentially be an unknown to credit rating companies, although other things (like missing a gas bill for example) can negatively affect your credit rating. Having a credit card and using it as you would cash (i.e. paying the balance in full every month, not carrying a balance, not spending money you don’t have) would allow you to build a record of good credit behaviour, which will potentially give you more favourable terms for when you do need to borrow money in the future (for example a mortgage). Address-wise, credit ratings are tied to addresses as this is how they track people through the system. Halls have wacky credit ratings because so many young people in all sorts of stages o
Whether or not your are on the electoral register for your council/borough/local-flavour-of-government makes a difference. UK credit agencies like to see that your “rooted to your community,” and for reasons that are baffling to me, feel that adding yourself to the register of voters is a big deal.
