Building credit score for 18yr old

Building credit score for 18yr old

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The Gauge

Original Poster:

4,719 posts

28 months

Wednesday
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My son is 18 and wants to build up a credit score for himself. He was recently turned down by Apple when trying to buy an iPhone from them on 0% interest over 18 months as he didn't have any credit score. Would be nice for him to get a credit card soon too.

He started employment a few weeks ago so he has a wage, and he lives at home with us. Would setting up a direct debit for something help obtain a credit score?

Mandat

4,227 posts

253 months

Wednesday
quotequote all
The Gauge said:
My son is 18 and wants to build up a credit score for himself. He was recently turned down by Apple when trying to buy an iPhone from them on 0% interest over 18 months as he didn't have any credit score. Would be nice for him to get a credit card soon too.

He started employment a few weeks ago so he has a wage, and he lives at home with us. Would setting up a direct debit for something help obtain a credit score?
Starting a line of credit and servicing it regularly will start to build up a credit score.

Quickest way of doing this would be to get a credit card and making sure that it is paid off every month.

AndyAudi

3,450 posts

237 months

Wednesday
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Get a credit card, even just using once a month to say fill the car of fuel, set up a DD to pay it off

Jamescrs

5,285 posts

80 months

Yesterday (06:46)
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A credit card would do it, he will probably given quite a low limit which is fine.

Go on one of the comparison websites and they give a good indication on how likely he will be to get approval which saves making a number of applications.

TheGroover

1,032 posts

290 months

Yesterday (10:33)
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My son got an aqua credit card as a student for this purpose. As others have said, it was a low limit initially, a few hundred pounds I think. The interest rate will be high, but not an issue so long as the discipline is there to pay off the full balance every month. It definitely helped his credit score.

Jermy Claxon

3,093 posts

154 months

Yesterday (10:43)
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You don't improve your score by having a credit card unless you use it.

So, use it once, then OVERpay the balance by £5 using a debit card (so there's no linked DD). So, they owe you money, but critically the balance is not zero, and they will not close the account either, then put the card in a drawer and forget about it. It will show on credit reports as being used every month, and you don't need to do anything. I discovered this purely by mistake, but it works, and you don't need to make a transaction each month.
Yesterday (10:52)
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Free credit score providers usually have a checker for 'pre-approved' and 'credit score builder' credit cards.

Double-check those and ensure there are guaranteed credit cards with '0% for X months' (after which it is usually a gazillion per cent APR). Pay the spend balance off every month in full, stop using it once the 0% period is over and try and find another.

Other things like electoral register, having a contract/utility bill under someone's name can also contribute to a credit score.

If there's nothing online, check in branch at the bank or consider opening an account with a smaller bank or building society where you're likely to be able to deal with someone in person and not fobbed off to consult online or telephone banking. The smaller banks / building societies could be a bit more flexible, lenient and willing to engage the manager or find a suitable product.

Salary helps, of course. Several years ago I took out my first credit card as an M&S Bank customer. I was in full-time employment and I was approved for it with a credit limit of £4,000 and 0% for 24 months, which of course I maxed out and paid off over a seemingly generous 0% grace period.

FriedMarsBar

468 posts

47 months

Yesterday (11:27)
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A bit lazy posting an ML but it's a good summary of how credit scores work and how you can improve them.

https://www.moneysavingexpert.com/loans/credit-rat...

mikef

5,602 posts

266 months

Yesterday (16:34)
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FriedMarsBar said:
A bit lazy posting an ML but it's a good summary of how credit scores work and how you can improve them.
Lazy_banal_article said:
Companies use any data on previous dealings they've had with you to feed into the credit score. This means those with limited credit history may find their own bank more likely to lend to them than others
Er -

My daughter also got turned down recently for the Apple iPhone interest-free deal. Except it's not Apple doing the Finance, it's Barclays. And she has tens of thousands in her Barclays accounts. And is a homeowner. But their application form doesn't ask who you bank with. Or whether you're a homeowner

There is something Kafka-esque about the way this now works and how financial status is assessed

And yes, she did buy the phone from her savings, but genuine no-catch interest-free payment is always good



The Gauge

Original Poster:

4,719 posts

28 months

Yesterday (19:14)
quotequote all
Jermy Claxon said:
You don't improve your score by having a credit card unless you use it.

So, use it once, then OVERpay the balance by £5 using a debit card (so there's no linked DD). So, they owe you money, but critically the balance is not zero, and they will not close the account either, then put the card in a drawer and forget about it. It will show on credit reports as being used every month, and you don't need to do anything. I discovered this purely by mistake, but it works, and you don't need to make a transaction each month.
That's a great idea if it works, thanks

Edited by The Gauge on Thursday 3rd July 19:16