General Chat

My 27 year old son has a poor credit record. Reason seems to be that he has never needed credit for anything and doesn't want a credit card. If he wants something, he usually borrows temporarily on interest free from us - he borrowed £1k off us for his car last year. Car cost him £3k, and he had £2k in bank account. Has already paid £1k back.

He has seen a TV in Tesco for £300 on interest free credit. But thinks he will be refused because of his "poor" credit rating. He has that sort of cash anyway. And I know he doesn't want to be rejected for credit as he might try to buy a flat or house in next couple of years.

How do you increase your credit worthiness without borrowing money?

Get a credit card, charge small items on it through out the month, and pay off as soon as the bill comes in. He can set up a DDR to automatically pay the balance if he is worried about forgetting. If he uses a car, he could charge the petrol cost to it.

Or if he could change his phone to a contract rather than pay-as-you-go. He'd get a better one for his bucks which he'd probably enjoy using

DET. Many thanks. Two excellent ideas. Think he will prefer phone route as he loves techie things and a contract might allow him to get a more sophisticated phone :-D

Has seen his dad and sister get caught with credit cards and lack of dicipline too many times for him to feel comfortable with one :-(

How can you have a poor credit record if you have never had credit ?..

its supid isnt it, but as DET says, a credit card, wheras he pays of the balance monthly n a contract moble which you can get for as little as £10 a month nowadays,

maybe a catalogue, just to buy a few things, pay it straight of again wll boost his rating,

I thought when you apply for a mortgage, they looked in to your credit rating history not just for credit cards loans etc but at bank accounts as well, in goings and out goings and so on, and if there has been judgements against you and if they show settled thats ok, I also thought they will look for utility bills as well,also I thought they look in to others in the household if for instance the applicant lives with their parents their rating which in my opinion is wrong as they are not the ones asking for a mortage. Also if they are on the ER and how long. Its seems silly to me that someone that has lived with in their means and saved for what they want without asking for credit, but shows a healthy bank account should have to ask for credit to prove their worthy of borrowing money. :-S

aivlyS, it is odd isn't it, but that's the advice that some of the Money Experts on TV give.

Try to get your own credit report on-line from one of the Credit Agencies, such as Experian, and they ask for CC details to run the report. Interesting reading and free as long as you phone to cancel within the trial period.

You can do it by post where it might cost something in the region of £2 (might have gone up a bit)

Have a read of this
http://www.moneysavingexpert.com/loans/credit-rating-credit-score

We had that problem and got credit cards...was a slippery slope after that ......they're cut up now.....my own fault but used properly and sensibly it's a great way round it.

Thanks DET ... wont bother with the link I assume seeing as I have never had credit I will automatically have a bad credit rating .

do have a look a the link - scroll about 3/4 of the way and there is a blue box
******
The Credit Checker

Quick check whether you are a good or bad risk.
It asks ten quick questions and estimates what your credit rating is like.

This isn't definitive, but if you want to quickly see how you fare, then...
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The link also advises "Get a 'quotation search' not a 'credit search'. If you're just trying to get a specific quote for a loan, ask the lender to do a 'quotation search' and not a 'credit search'. This means the enquiry won't have a negative impact on your credit score."

Its hard to get credit checks if you have no history of how good you are at having credit.

The more credit you have had/or got the better,as then a fair assesment can be made if you are a risk or not,! stupid really.

Thats the one thing I am gratefull for that Itsmytelly is a TT, because he is of the old school you save for it or nothing.

My Mum is a prime example she has never so much as had a debit card, bank account yes, but she draws money as she needs it, and every time we are shopping Mum will watch as I pay for mine on my debit card and ask me to pay for her's, when I why she thinks I am not actually paying for my goods. :-(

Kay it is , if you say live at home with your parents, if you share a flat for example and pay your gas bill monthly by DD then that will show as credit.

It's a state of mind, itsn't it? (plus self control)

We charge anything over about £10 to the CC, but know that we have to pay it off at the end of the month. If the money won't be available in the bank account, we don't buy the item.

There are financial advantages to using a CC. Say you order an expensive item, or book a holiday/flight. If the company goes bankrupt, the CC company are likely to refund the cost. You might get a better deal on Goods if you barter and pay cash, but there is no protection if the ordered goods can never be supplied. You're waaay down on the list of creditors and are unlikely to get a full refund.

I also believe if you want something save for it ... funny how changing the word to credit makes it sound OK ... in my day it would of been called debt and it would of been shameful to be in debt .

Or the drip or the never never :-D

Hard to save when you have given up a well paid job to look after a relative , hard then to avoid credit when the window comes off in your hand when you open it, hard to avoid debt when you are struggling to feed and clothe young children and keep a roof over their head.

Please don't class all 'debtors' as profligate, it isn't the case and gets right up my nose....circumstances are individual.... a mortgage is 'debt' or 'credit' , whichever phrase suits, but few people are able to buy outright surely?

Well Yes Rose ... but I think this is exactly why people land in difficulties when you take on a mortgage or anything that needs to be paid up you should not be stretching yourself to the hilt so that when something unexpected comes up you are in dire straits , think we all know life never runs totally smooth and things will and do crop up that will need repairing or replaced .

well yes Sylvia, but even NOT overstretching oneself doesn't help in times of 'disaster' so to speak... plenty of people out there right now who could easily afford the mortgage when they took it out,...redundancy, relationship break up, death of a partner, any number of 'outside influences' can affect people...hence the rise in re-possessions.

A lot of the repossessions are caused by people taking out more loans to pay for the debt they already have ... pretty stupid , this pay day loan lark is just stupid anyway the bottom lie is if you take things that you cannot pay for they WILL have to be paid regardless of what life throws at you .. simple really ..