How does someone moving to the UK build up their credit rating?

Question

I have a friend recently moved over from Italy, the bank will not give them an overdraft or a credit card, so they are finding it difficult to get a decent credit rating. They have registered to vote- any other helpful hints?

Answer 1

There you go. Few tips.
1. Do not expect to get any kind of credit (overdraft, load, mortgage etc.) when you have just moved to UK. This is understandable from the banks point of view as well.
2. But you can get some credot cards issued by some banks. Do not fall into traps of rip offs,where some banks ask you to pay to get a credit card. Usually at the start you will get somewhere around £350. If you use the card frequently and keep paying the money back in time, then viola your credit rating is already improving. But if you are not paying in time,then credit will drop faster than you can imagine.
3. CAUTION: Do not apply for too many credits (overdrafts, loans, credit cards etc.) within a very short period. For every rejection you will get, your credit score will keep going down and so will the chance of getting rejections for others application. Its a vicious circle.
3.If you want to apply for any credit (especially overdraft), atleast give the bank 6 to 8 months (almost allthe banks have their own credit system,other than the normal credit rating). If the flow of money (both in and out) is good, then you could get a better current account as well as overdraft.
4. CAUTION: A sudden increase in your account will be considered suspicious, a regular flow is required (ofcourse with the proof...e.g. your paycheck).
5. If everything goes well and your rating is good,then banks will not just offer your overdrafts,but will also try to sell you accounts,where you'll have to pay money to have them. I suggest, stay out of these traps.
6. MAIN: MONEY ATTRACTS MONEY --- you show them money,they show you money.
7. If for some reason,you still don't get any kind of credit, check your credit rating on e.g. experion.I believe for £2 you can get a detailed report. And check may be they have some incorrect information.
8. Any bill you pay affects your credit rating....phone,mobile, gas, electricity etc. If you are paying them fine, your score will keep getting better.
9. It takes time to get up the credit score ladder, but any mistake (e.g. forgotten payment) and you slid sharply down the ladder.

---- For a credt card--- try Natwest or even CapitalOne. CapitalOne usually offer a credit card of £250 to anyone. But make sure you use it and pay money back in less than a month, cos they charge a huge amount of interest, but if within a month, no interest.

Answer 2

Before I start this answer, I have a stinking cold and have had an extremely stiff hot toddy! So some of this may not make total sense!

Credit ratings are based on credit history, so how much credit history did he have in Italy?

What is his job? Is he on a salary, in which case it will be much easier to get a credit card or an overdraft - after all, you have a regular amount coming in each month.

Which bank did they use in Italy? Do they have an arrangement with a British bank? If so, he should get himself transferred to the British one, then they have a proof of his credit history.

Make sure he pays all his utility bills regularly and in a timely fashion - it proves he can be relied upon.

Ask the bank he belongs to how long it would take him to get an overdraft or a credit card now he is with them.

How much of a friend is he? Would you trust him if you were a guarantor (ie, you promise to pay if he doesn't)? That may also be a way to start his credit rating.

However, I am a little suspicious as I know banks talk to each other across country boundaries - so what was his credit like in Italy? That may be the real reason why he cannot get credit over here.

Hope this helps (through my alcohol-induced view!)

Answer 3

I've just read Anie Cha's reply and I endorse it completely. When your friend has been here a year, he or she could not only get an overdraft and credit card but also apply for a bank loan. If your friend repays that OK, get another and then another. That way you build your credit rating.

But as Anie says, beware of the sharks. Many banks are looking for people they call "revolvers" who repay only the minimum amount and get deeper into credit card debt.

And the best tip I ever received was whenever you see the word "credit", change it to the word "debt". Then you will see more clearly that "credit" always means you are selling next month's or next year's salary to the lender.

Answer 4

Try a different bank. Banks that don't offer an overdraft or credit card to someone who doesn't have a credit rating yet don't deserve your custom. Assuming that they don't have a bad credit rating already of course (i.e. behind on repayments etc).

Answer 5

Yeh, win the lottery, sorry I know thats not helpful but I can't get a bank account & I have lived here all my life