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Daughter is trying to take out a mobile phone contract but was refused as she has no credit rating.
She has a couple of direct debits that go out her current account, and is registered to vote.
She has looked on Experian and it didn't find anything for her.
I am reluctant to put in my name as that doesn't really solve the issue.
Any suggestions?
I’m guessing giffgaff, or another prepay provider, isn’t the solution you’re after?
She'll need to start with the most basic things to get some credit history, does she drive/pay for car insurance herself? Paid monthly will count as borrowing and paying back.
Also how long has she had the current account? That should help too after a while.
A credit builder card as well, put small day to day purchases on it instead of a debit card then pay off in full each month.
Was it a costly phone contract? Maybe short term take out a sim only contract and buy a phone outright.
No credit history can be as bad as a bad credit history.
No credit history can be as bad as a bad credit history.
This is true..does she really need credit? Any decent mobile proivider will offer a rolling 1 month contract anyway so theres no credit risk..
I've turned the tables on my contract, it's still a 12 months contract but unlimited calls and SMS, with 12gb data, but it's only about £10-12 per month. It's often cheaper to just buy the phone outright and then you have the freedom to choose a plan/ISP to suit your needs.
At age 18 we did this with the kids off:
Made sure they had adult bank account.
Took out 30 day sim only mobile contract.
Credit building credit card - they dillingently paid off each month and spent something on it each month.
Paid a 3-month subscription to Netflix/Disney/Spotify.
They've both now got perfect credit history at age 19.
Any decent mobile proivider will offer a rolling 1 month contract anyway so theres no credit risk..
They won't if you're getting a phone as part of the contract. Most of the big names will continue a completed contract on a monthly basis but it doesn't sound like that applies here.
It’s often cheaper to just buy the phone outright
It is, but maybe buying outright is not an option if you're 18, want a "nice" phone and are a bit strapped for readies.
Another thing, there's 3 main credit reference agencies, it's a good idea to register with them all - and none of them will cost any money to access. Don't pay to access any credit reports.
Clear score - Equifax
Credit Karma - TransUnion
MSE credit club - Experian
Oh, and they all have jobs with salary paid in.
buying outright is not an option if you’re 18, want a “nice” phone and are a bit strapped for readies
Controvertional thought maybe a "nice" phone at 18 isn't an option if you are a bit strapped for readies. Plenty of decent cheaper new phones out there and loads of excellent second hand phones out there, many like new for a fraction of the cost.
A mate of mine worked at experian and I had the same problem, no information is worse than bad info. I have no need for credit but you need to show you can manage debt, so take out some debt and repay it.
I would fail most basic credit test so tell anyone asking not to waste their time.
Option, take out a small bank loan for 12 onths to use to buy a nearly new phone from the likes of "Magpie" and get a PAY AS YOU GO sim. Job jobbed after 12 months.
I took out a bank loan at 19 for my grouset on a bike - I didn't need to, as I'd bought everything else, but needed to start a credit rating.
It is, but maybe buying outright is not an option if you’re 18, want a “nice” phone and are a bit strapped for readies.
When you say 'nice phone', are you talking about a £1000 phone for the latest iphone when a £300 phone will do exactly the same thing, and probably better?
39.... No credit history.... Pre-pay FTW.
I only ever got a credit card to help my credit rating, I set it to auto pay the balance every month and only ever put petrol on it.
Controvertional thought maybe a “nice” phone at 18 isn’t an option if you are a bit strapped for readies
When you say ‘nice phone’, are you talking about a £1000 phone for the latest iphone when a £300 phone will do exactly the same thing, and probably better?
You're preaching to the choir but then I'm a long way past 18! I do seem to vaguely recall that sensible financial decisions weren't a big part of my life back then though.
Phone contracts seem to need a higher credit rating than getting a small loan to pay for a car, or running a credit card. I had the same problem, a few months of using a credit card and I could get a phone contract.
Thanks all. The direct debits she has pay for Spotify and Disney accounts.
Will see if she can apply for a credit card and just use that for few months to see if that helps build a credit rating.
The other option is for her to buy a phone and then go Sim only I suppose.
Will see if she can apply for a credit card and just use that for few months to see if that helps build a credit rating.
There are specific cards for building rating. £300 limit and horrendous interest.
Get a credit card and use it for everything , making sure it is paid off every month.
Can’t remember the last time I used my current account card for anything .
At least with the CC you have additional protection for purchases , plus if anyone wants to try a scam it’s the providers problem.
( I had money taken from my current account from a card skimming years ago )
Phone contracts seem to need a higher credit rating than getting a small loan to pay for a car, or running a credit card.
They can reposes a car much more easily than a phone!
I can't recall if this sort of thing was a problem when I was 17/18?
I seem to recall my 1st bank account came with a very basic debit card only for the first few months which only worked in cash points and couldn't buy anything in shops. Then after the trial period it got upgraded to a normal debit card. I did have a monthly wage paying in by then.
Vaguely recall getting a Lloyds credit card with something like a £250 limit maybe in early 90s.
They Egg came along and offered just about anyone a £8k credit limit mid 90s or was it £4k?
How do you find out if you have a credit rating? I've a daughter of similar age her bank didn't accept her credit card application even though she's perfectly sensible (and didn't really need it) but I guess you don't want this to be an issue in future. I mean I've seen the ads where people lay on sofas with nothing better to do than check credit scores, is that it?
How do you find out if you have a credit rating?
One easy way is to sign up for the MSE Credit Club, they'll check it every 30 days and update you if anything changes. MSE has advice in their site about building a credit rating.
Get a credit card and use it for everything
Be careful. credit rating agencies will look at how much short term credit you use on a monthly basis, if you've a credit card and you max it out every month that doesn't look good.
It won't just be down to credit 'score', they will be looking for trace as well. Make sure she's on the voters roll as soon as you can. Not massively helpful in this case, but limiting access to credit at that age really is no bad thing. You would be amazed just how much you can stuff up most of your twenty's financially before you even reach them. You say you don't want to take it out in your name, but have you looked into whether there is an option to open account in joint name or guarantee a small loan?