Why do you need to get into debt to recieve a credit rating surely you should have a better one if you have no

Question

debt, i pay all my bills on time, i dont have an overdraught iam never in the red, but can't even have a contract mobile phone because i have no credit rating and they can't find me on there system? Frustration.

Answer 1

Yes it is stupid but put yourself in the position of a lender - i.e. in this case the mobile phone company. Because you have never borrowed before, don't have an overdraft etc, there is no record of you paying back properly (no record of you not paying either I know) so you are an unknown risk to them. Lenders will only want to lend their moeny/products/services to someone who is a low risk. You should build up a bit of a credit rating first by say, getting a credit card and then paying the full amount off each month., or getting an overdraft etc. This won't cost you anything and you could even make some money from it - use a credit card with a cashback feature!

Answer 2

I can understand your frustration, but a credit rating is important to companies who are going to put themselves at risk by offering services, credit or loans to individual. By establishing a credit history, it allows those companies to see how responsible you are in handling credit, and indicates what amount of risk they have in giving you service. If the company was to give you a telephone contract, you abuse it and rack up thousands of dollars in charges, then decide not to pay, it is their loss.
Establishing credit is relatively easy - take out a small loan from the bank where you usually do business, or take out a credit card that would get reported to the major credit reporting agencies, and simply make all payments on time. You do not need a lot of credit to establish a record, but it is helpful to potential creditors if you have a credit record.

Answer 3

There are two basic types of searches recorded on your credit file, a credit application search and an enquiry. Only credit application searches are seen by lenders, so that they can make an assessment of how ‘credit active’ you are. There are lots of myths about the problems caused by having several credit application searches recorded on your credit file. Certainly, many searches within an hour or two can indicate a possible fraud, and dozens in a month can indicate financial desperation, but up to about 12 searches on file in a year is perfectly normal and is expected. Very low levels of searches can tell lenders that you are not very credit active, so they may not be so willing to lend to you

Answer 4

well it is stupid and i feel this is way of credit card companies just making money off of people who don't want credit cards. however seeing how this is the way things work, i guess if you just get one credit card and pay the balance off on time for few months you would have no problem getting a mobile phone contract.

Answer 5

As you have never been in debt or had loans or credit cards you have no credit raiting, i know the feeling its hard but why go into debt if you don't need to, pay as you go phones are far better anyway.

Answer 6

its stupid i know, but these companys can't just go around collecting everyone's details just in case they need to research you. your best bet is to get 1 credit card and just use it for 1 things, say getting petrol. then set up a direct debit so that the bill will always be paid, then its like not having the card at all, and you will get your good credit rating

Answer 7

It is very annoying as i experienced the same thing even though i had had a bank loan with my own bank paid off with no problems another bank wouldn't give me a loan.

Read this post for some advice.
http://uk.answers.yahoo.com/question/index;_ylt=AkeuJcYO2JqPIIsLMve9ILsSBgx.?qid=20061230214117AApfsey

Answer 8

So that they can see that you pay your bills.

Answer 9

yes mad isnt it