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I have a bank account in UK since 9 months ago, and just have a debit card, didn't buy anything with credit before.
I have a pay monthly mobile sim card,
Today I went to buy a new mobile with pay monthly, and they told me that I can buy this mobile because of my credit score doesn't allow me to buy this mobile and I can buy another cheaper one.

My question is how to increase this credit score while I didn't get anything before on credit?

I am asking in case I wanted to buy in the future something more expensive such as a car for example.

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"Get a credit card" is NOT the answer. The reason people have a bad (or no) credit score is often because they're new to the country, have just turned 18, have previously fallen into arrears or are just bad with money. Getting a credit card is risky because, if you don't stay on top of your payments, it'll just damage your score even more.

Now, it sounds like I hate credit cards - but I don't, and they do have their benefits. But avoid them if possible because they can be more hassle than they're worth (ie, paying the credit back on-time, cancelling accounts when the interest comes in, moving money in and out of accounts). It's risky borrowing money from anywhere whether it's a payday lender, a bank, a credit card, etc., so use them as a last resort. If you've got your own income then that's amazing!, try not to live outside of your means and your credit score will look after (and increase) itself.

It takes time to build a good credit score, but always make sure you pay the people you owe on time and the full amount. I'd stick with paying your phone provider (and any other direct debits you have setup) and avoid getting a credit card.

I'd recommend Noddle to keep track of your credit score and read their FAQ on how to help build it. Unlike Experian, it's free forever so not quite as detailed... but Noddle are owned by CallCredit - one of the biggest Credit Reference Agencies in the UK so they should have the latest information on yourself.

In conclusion, if you already have financial commitments like a mobile phone bill, gym membership, store cards, anything that gets paid monthly by direct debit... your credit score will increase (provided you pay the full-amount on time).

I hope this helps.

PS. I don't work for any of the companies here, but I've been working in the finance sector (more specifically, short-term loans) for 3+ years now.

  • Yes, I am new to the country, just 8 months, so what you are saying is that if I kept using my normal debit card and everything on time will increase my credit score over time? Because I really don't like credit cards, and can't see a need for it in my life style. – AME Mar 3 '15 at 11:25
  • Absolutely. If you already have financial commitments like your phone bill, gym membership, store cards, (anything that gets paid monthly by direct debit), your credit score will increase provided you pay the full-amount on time. – trashpanda Mar 3 '15 at 11:34
  • Great, you helped me a lot, since you have finance experience, keep answering questions here, it will be very helpful for us to hear from a financial person . – AME Mar 3 '15 at 11:39
  • You're welcome! I've just read my answer back and it sounds like I hate credit cards... I don't, and they do have their benefits. But avoid them if possible because they can be more hassle than they're worth (ie, paying them back before they charge interest, cancelling accounts when the interest comes in, and so on). It's risky borrowing money from anywhere whether it's a payday lender, a bank, a credit card, etc., so use them as a last resort. If you've got your own income then that's amazing!, try not to live outside of your means. – trashpanda Mar 3 '15 at 11:48
  • The Noddle link returned an error message. You are welcome to edit to return a good link. – JoeTaxpayer Mar 3 '15 at 13:32
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It's probably important to understand what a credit score is.

A credit score is your history of accruing debt and paying it back. It is supplemented by your age, time at current residence, time at previous residences, time at your job, etc.

A person with zero debt history can still have a decent score - provided they are well established, a little older and have a good job. The top scores are reserved for those that manage what creditors consider an "appropriate" amount of debt and are well established. In other words, you're good with money and likely have long term roots in the community. After all, creditors don't normally like being the first one you try out...

Being young and having recently moved you are basically a "flight risk". Meaning someone who is more likely to just pick up and move when the debt becomes too much.

So, you have a couple options. The first is to simply wait. Keep going to work, keep living where you are, etc. As you establish yourself you become less of a risk.

The second is to start incurring debt. Personally, I am not a fan of this one. Some people do well by getting a small credit card, using some portion of it each month and paying it off immediately. Others don't know how to control that very well and end up having a few months where they roll balances over etc which becomes a trap that costs them far more than before.

If I were in your position, I'd likely do one of two things. Either buy the phone outright and sign up for a regular mobile plan OR take the cheaper phone for a couple years.

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I've been in the UK for 3.5 years, and I have the same problem: I can't get even a small loan from my bank; no one will give me a phone contract; it's a nightmare.

I have 8 direct debits, I pay everything on time and I earn decent money, but still my credit is seen as no good.

I have got a few ideas for you though:

  1. Get a SIM-only phone contract (so you prove you can make regular payments, but no one has to take on the risk of giving you an expensive phone)
  2. Make sure you're on the electoral roll
  3. Buy something in Argos and register for their store card - I took payslips and proof of address for this
  4. Register with NODDLE and you can check what credit card you could get, without having to actually apply (in my case an AQUA credit card with 250 pounds available)
  5. and of course always pay everything on time, and check NODDLE every month

Good luck!

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You need to get yourself a credit card, and use it regularly and also repay on time. This will help increase your credit score.

Hope you have a regular job which is bringing in money every month, but having just this isnt enough, get a credit card.

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Do you have the option of paying cash for the phone?

To answer your question though:

Essentially, you have to use credit RESPONSIBLY.

That doesn't mean go get a slew of loans and pay them off. As Ratish said, a credit card is a good start. I basically buy everything with a card and then pay it off every month when the bill comes out. I actually have two and I alternate but that's getting nitpicky. It should be noted that simply getting a card won't help your score. In fact, it may go down initially as the inquiry and new account opening may have a negative effect. The positive effect will happen as you develop good payment behavior over time.

One big thing you can do, in your case, is always pay your mobile bill on time. Having a good payment history with them will go a long way to prove you are responsible.

  • Yes, this is what I will do, I will buy it cash, I pay my mobile bills on time as it take the money from my debit card directly every month, when I get a credit card should I change the bill to take from the credit card instead of the debit one? – AME Mar 1 '15 at 23:24
  • @AmrElGarhy : I would. In fact, depending on your credit limit, I'd pay as much as possible with the card and then use the bank account to pay the card off either at the end of the month or when I got close to the limit (whichever comes first). Heads up: don't expect a high limit if this is your first card. – geewhiz Mar 1 '15 at 23:32

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