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Thread: How does Credit work? I dont think I have any credit history

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    Gold Member Marcos's Avatar
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    How does Credit work? I dont think I have any credit history

    Im only 19 but should I do things to help it along?

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    HEXUS.social member Agent's Avatar
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    Yes.
    Get yourself a Credit card now. Its a real PITA to get things in the future (think housing ) if you have no credit history.
    I got a Mastercard on my 18th, but im good with money in the respect that i dont spend what i dont have. The banks hate me in that way though, as opposed to using my debit card, i use my credit card for everything, then just put the money into my account the same day via internet banking.
    A few times ive left a small amount unpaid, then paid it off the next month. Im talking about a few quid here. Apparently it really helps your rating.

    Im now 20, and the bank has raised my spending limit 3 times already. Also get phone calls off them a lot trying to get me to sign up to different things

    If you get one though, be sensible. Don’t spend what you know you cant pay back. Ive never brought anything on my card that couldn’t be paid the same day out of my current account. Some people give themselves till the end of the month to pay. Just be careful, don’t let it go to your head !

    Zak is the dude for this
    Last edited by Agent; 04-04-2005 at 04:41 PM.
    Quote Originally Posted by Saracen View Post
    And by trying to force me to like small pants, they've alienated me.

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    HEXUS webmaster Steve's Avatar
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    ^^^

    What he said. I am 18 and just got a Visa and am going to be using it exactly like Agent has.
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    Banned myth's Avatar
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    I got a visa debit card from my bank... I use it for evrything Credit? Who needs it! lol I did drop below my balence once and the bank acout had overdraw protection!!! So they charged me a arm and a leg...

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    I'm only 15. but so if you overspend a few quid every now and then, as long as you pay it off soon enough, its actually good for your credit history?

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    HEXUS.social member Agent's Avatar
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    Quote Originally Posted by XA04
    I'm only 15. but so if you overspend a few quid every now and then, as long as you pay it off soon enough, its actually good for your credit history?
    Yep.
    Your credit rating is basicly "Can you be trusted when paying back money that you have borrowed".
    Thats why i let a small amount run over some months (a few quid), as if your never in debt from one month to the next, apparently it doesnt help your rating as fast.

    Note : I am not a banker. I have never worked in a bank. What i have just said was told to me by somone who has worked high up in banks for around 30 years, so i fully trust her on matters like this.
    Quote Originally Posted by Saracen View Post
    And by trying to force me to like small pants, they've alienated me.

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    Quote Originally Posted by Agent
    Yep.
    Your credit rating is basicly "Can you be trusted when paying back money that you have borrowed".
    Thats why i let a small amount run over some months (a few quid), as if your never in debt from one month to the next, apparently it doesnt help your rating as fast.

    Note : I am not a banker. I have never worked in a bank. What i have just said was told to me by somone who has worked high up in banks for around 30 years, so i fully trust her on matters like this.
    Ok, thats pretty useful information. Thanks

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    iMc
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    On my credit card I can pay either in full each month or 3% of total each month (min. £5).

    How do I choose how much to pay each month e.g. This month I want to pay £15, next month I want to pay £36 etc...
    HEXUS|iMc

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    Gold Member Marcos's Avatar
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    I was offered a platinum barclaycard about 6 months ago, I'm yet to activate it but i hate debt so i will be sensible with it.

    Annoyingly barclays offered me the barclaycard when i asked for a proper VISA debit card, they told me I couldnt have one but they'd happily give me a credit card with £1000+ credit

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    If your 5555... Swafe's Avatar
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    I've got a grand interest free overdraft.....I plonked the grand into a high interest ISA and when I get some interest I'll pay it off - probably in about a year

    So I get interest.....I take it this will improve my rating too ?
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    HEXUS.timelord. Zak33's Avatar
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    you can do this without it costing you much dough and it WILL help you, long term.

    Work out what you can EASILY PROVE you can afford...not what YOU think/know you can afford but what you think someone else won't stress about.

    Lets say....£300.

    Go to a High Street Bank, where you have an account, and if you DONT have a current account, open one now.

    Apply for a loan for "a Stereo I saw in Curry's, but which they want to charge 26% APR on".....you want a sensible loan, not a rip off one. Pretend banks are your friends...they will be one day.

    You want to borrow it over about 18 months, and can afford about £20 per month with no effort.... but would like to be able to pay off MORE than that if you want too. Also, you DONT WANT INSURANCE (explain later....but you dont want Life/Accident/Sickness/Redundancy insurance)

    Get the loan, sign what you have too, prove you live where you live, work where you say and earn what you say. Don't lie. Take a couple of bank statements with you, soke pay slips, and a driving license or passport too. Dont expect your first loan to be easy....but it IS essential. Jump through hoops. Its the game. Play it.

    Once you have the loan, in your account, take it and put it in a Building Society somewhere else, either online or by going in yourself. Cant hurt having a Building Society account

    Now, every month, make the payments from your salary, like a good borrower and if you can't afford one month (apart from me slapping you), take it from the money in that building society account, which is making a tiny bit of interest anyway. Its safe, you can pay off the loan with itself if need be.

    Either way...NEVER MISS A PAYMENT....EVER. NEVER MISS A PAYMENT. NOT BY EVEN ONE DAY.

    Then, after 4 or 5 months pay the whole loan off, with the money in the Building Society. Clear the loan. Ask the bank how to do it.

    OK it has cost you a little cos you earned less interest than you were being charged and you MIGHT have been charged a small admin fee, maybe even £30 in total...such a waste The reason you didnt want insurance on the payment is that you never spent the money, so could ALWAYS afford it. They dont need to know that. Insurance is expensive and only worth it IF you are at risk. You will have to sign a declaration to admit you understand you will always be due to pay even if you die. Its a sales technique to scare you. Yup...even High Street banks do it. They make more money from Insurance than from loans. And they OBLIGED BY LAW to offer you it anyway.

    ..so long as you pay if off monthly and then settle it outright, you're on the path.

    Then apply for a Credit Card, small amount, and use it once or twice, pay it ALL OFF when the bill arrives, dont incur any interest charges.

    Then don't use it for a few months...maybe 2 or 3

    Then spend about £100 on it, and then just pay HALF of it off one month and half the next month. Dont use it after that. Leave it open though. Don't cloe it. This bit will also cost you money in interest, but its essential.

    Within 1 year you will have them BEGGING to lend you dough.

    If, in that time, you see a deal in Curry's/Comet/Dixon etc for 0% finance on something you want and can EASILY afford, buy it on 0%, and pay it off before the 0% runs out.

    Sorted

    Quote Originally Posted by Advice Trinity by Knoxville
    "The second you aren't paying attention to the tool you're using, it will take your fingers from you. It does not know sympathy." |
    "If you don't gaffer it, it will gaffer you" | "Belt and braces"

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    Gold Member Marcos's Avatar
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    Do I have to do that loan part? I already have a barclaycard

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    Zak is a genius on toast in such matters!

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    HEXUS.timelord. Zak33's Avatar
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    yes...its well worth it.

    Quote Originally Posted by Advice Trinity by Knoxville
    "The second you aren't paying attention to the tool you're using, it will take your fingers from you. It does not know sympathy." |
    "If you don't gaffer it, it will gaffer you" | "Belt and braces"

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    iMc
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    Anyone use HSBC Internet Banking?

    If so can you guide me through how to make payments from my current account to my credit card. At the moment it just gives me a choice of paying in full, or a crappy minimum payment. I want a middle ground.

    E.g. Pay the minimum but also add on as much as I feel I can afford each month.
    HEXUS|iMc

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    HEXUS.timelord. Zak33's Avatar
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    you see, what happens is that as you become a better safer bet for lenders, they charge less.

    The safer you are, the lower the risk, the more money you can borrow at lower amounts. Then as your income goes up, you get t have a persnal account manager, who you may even have to PAY FOR (I pay £150 per year for mine) but in exchange you get vastly better service AND cheaper loans, mortgages (critical at this time for me) , insurance etc. etc....free Holiday Insurance etc etc... The service you get back IF YOU FIND A BANK YOU LIKE, is worth it all.

    I tell you now,,,you CANT BEAT THE BANKS.....dont even try. Just play along.

    It's a big game, like a real world version of a Management Sim. Weirdly, that lot up there I have laid out will cost LESS than buying PC Management Sim

    Quote Originally Posted by Advice Trinity by Knoxville
    "The second you aren't paying attention to the tool you're using, it will take your fingers from you. It does not know sympathy." |
    "If you don't gaffer it, it will gaffer you" | "Belt and braces"

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