My 19 year old daughter went to get an iphone 5c on contract at O2 yesterday but was refused by the online credit rating.
She has a part time job whilst studying at uni, has a student loan, has debit cards but no credit cards and no direct debits coming out her accounts.
So , like her current contract that she took out two years ago, it has had to go in my name and she transfers the money for her bill to me every month.
So what is the best, and safest way, for her to build up a credit rating? I suggested she get a credit card from her own bank and maybe buy something on it each month instead of using her debit card but pay it off immediately.
Would this work, any other suggestions?
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One factor about credit rating is being on the electoral register - is she on it? At 19 I assume so. But worth checking.
One of those credit cards with high APR might be useful - providing she always pays it off in full. Or one from her bank.
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>> Would this work, any other suggestions?
It will help, but might not be enough. O2 are pretty strict with new iPhones, Mine had to be referred for authorisation, simply because I had never had a personal mobile phone account before!
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Any credit card, operated for a year and managed properly, preferably full payment on time every time should be a good start.
Last edited by: Meldrew on Thu 5 Dec 13 at 13:25
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>> Any credit card, operated for a year and managed properly, preferably full payment on time
>> every time should be a good start.
The rules with credit cards and credit rating/score are a bit more complex.
Payment on time is a must with any form of credit. However, a small balance sitting on a credit card can score higher than having no balance at all. Presumably because the lender can see you are responsible and pay on time, but that they might earn a few quid out of you in interest.
Not that I would advocate leaving a balance on a credit card for any reason, normally.
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Could be worth a read of the advice at MoneySavingExpert's website:
www.moneysavingexpert.com/loans/credit-rating-credit-score
and associated links on the website.
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Might be worth signing up with www.creditexpert.co.uk for the free trial.
Always worth checking that there is nothing unexpected on your credit report such as wrong associations.
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I started mine off by a mobile contract, I suspect she will be able to get a cheaper phone on contract very easily. The problem is an Iphone costs around £500 and that is why the computer said no.
Of course my first contract was a couple of years before the big crash too so it may have been easier then but it was my mobile contract which started my history.
Even in the middle of the recession with no security and being self employed I was able to get a car loan for a brand new Pannda with low interest without any trouble. I also have a Halifax card which I use t0 help with cash flow when waiting for cheques to clear.
Edit what address did she use, if she is living in student digs it is likely a tenant who has lived there in the past has very bad debts and that can effect her credit history :(./
Last edited by: RattleandSmoke on Thu 5 Dec 13 at 19:30
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Not true Rattle. If you have no financial association with a third party then their information would not be used in an application for credit.
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>> Not true Rattle. If you have no financial association with a third party then their
>> information would not be used in an application for credit.
Up to a point Lord Copper.
"Redlining" where a lender just won't accept applications from a particular road or estate for example, was effectively outlawed years ago. But scorecards can still factor in a "postcode" weighting. So if you live in a high risk area some of that will rub off on you. If you live in a postcode where every other house has an occupant with bad history, your own creditworthiness will be rated lower - especially if yours is a "thin file", i.e. there is not much information of any kind about you.
The associations of people at the same address can also be wrong. You will see that if you get your bureau file details, and you can ask not to be associated with others at the same address, where there is no financial inter-dependency.
Some insight into postcode as a risk factor -
www.checkmyfile.com/postcode-check/CB4-1QP.htm
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Fair enough Guv. My involvement in scorecards ended in 2008. At that time we had no such postcode element toour decision making.
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Hang on, unless the generic score we took from the CRA included a postcode weighting. I can't remember, and to be frank don't care as I'm very glad to be out of that game.
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Certainly in my early days in finance we definitely "redlined" and with good reason, too.
Underwriting was seat of the pants. A quick UAPT check and a look at the proposal was enough for a decision.
Mind you, we did our own collections, so we had a pretty good idea where there were doors we did not want to knock on at 10PM, chasing payment!
(Our A to Zs fell open at NW10, NW2, W5 and so on!)
The Chalk Farm estate in Wembley was an instant "no", even in those far off days of the late 1960s.
Later, with a different company, we used credit scoring and were not allowed to decline an application which met the pass score - even if we knew the applicant was a knocker.
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>> Some insight into postcode as a risk factor -
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>> www.checkmyfile.com/postcode-check/CB4-1QP.htm
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>>
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Enjoying that postcode checker thing.
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Just checked ours and the Cameo database is spot on but the Censation one wrong by a large degree, enough to seriously affect a credit application if they give that data serious consideration.
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Tried my address - largely OK
Tried 2 of my son's addresses - wildly out.
Reports state mostly low cost housing, few with Higher Education etc etc
Almost all the homes around £500K, most are professionals, engineeers/accountants, lawyers, few cars over 3 yrs old, lots of BMs, Mbs,
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Same here - Cameo perfect but Censation has some seriously dodgy data.
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I can tell you how to lose your credit rating, very easily.
I have been debt free, mortgage etc, no actual debts other than the house since 1978,
5 years ago I had 3 credit cards with high levels £17K, £8K, £11K. No actual debt as bill paid in full monthly. High credit levels due to business use and they just kept increasing levels.
4 yrs ago being very ill I closed all but 1 x card, all banks accounts bar 1 etc etc.
All was well until 12 mths ago when a card split and 1 x card corrupted. Took ages to get new cards, delays, lost in post etc etc.
Decided I needed a separate card with another bank - Barclaycard was my first thought as they had given me a platinum card (£17K visa, £8K Mcard) & I had been with them for 30 yrs prior to cancelling in 2010.
Within days I was refused - retired, no recent credit activity (HP/Leases,Phones) - there would not be as I pay Visa Debit etc etc. I said my Pension was guaranteed income for life, no redundancy difficulaties..............THIN FILE was my problem - you cannot get credit unless you have a credit history etc etc.
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>> Same here - Cameo perfect but Censation has some seriously dodgy data.
And here as well.
The postcode only covers the development in which I live. A late nineties build comprising eight detached ans six semi detached houses. Occupiers are couples and families. Cameo captures that.
Censation describes a development of purpose built flats and maisonettes largely occupied by singles and couples. Apart form a few flats of former LA housing there's nothing in the whole village that fits that description.
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Looks like moving house was a good idea - my old street scored 336 whilst my new area is in the high 800s.
As others have found though, there's some dodgy data going on there. A postcode which I know covers four retired households with 7 cars between them is marked as Age 20-59 with low car ownership. Pinch of salt i reckon.
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Tried our old UK postcode, came out at 939, and both databases said almost exactly the same thing, and were pretty accurate to boot!
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919 Here.
Cameo perfect match.
Censation? Rubbish.
"Slightly higher proportion of children aged between 10 and 14" - None at all within 20 houses either side..
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939 here. Any advance on 939?
Dodgy old place, Reading.
;-)
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860 here in M21. The Primrose Hill of the North, some call it. 30 odd eateries and drinkeries mean punters swarm in to live here.
Load of tosh.
Ted
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Well, I can tell you that my credit rating is higher than HM The Queen. So much for reliability. SW1A 1AA has much to answer for if it only gets 909. "The social class of residents of SW1A 1AA is unknown at this time."
Last edited by: NIL on Thu 12 Dec 13 at 10:56
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>> 939 here. Any advance on 939?
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>> Dodgy old place, Reading.
I thought we'd moved up in the world going from Lower Earley (Asda) to Woodley (Waitrose), but our rating has gone from 939 (snap!) to 899 :(
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I tried our post code and the one for the street the is at right angles to ours. We live on the corner so effectively on both. Very different ratings for both post codes. If these are used for credit scoring then it's easy to see why some will have a poor rating even though they shouldn't.
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Focusless, I think there are more "aspirationals" in L.E. - i.e. more likely to have credit cards and debt. Woodley is for old duffers. No offence.
;-)
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919 for us in Surrey.
939 for my Mum's address in Berkhamsted.
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919 for me in West Sussex....
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Minus 313 for me in Cornwall.
:}
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958 here in Norwich. Can you lend me a few grand - you will get it back!
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656.... Thats south bucks for you!
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How to get a credit rating? - rtj70
