When it comes to getting credit for the first time it can often be difficult, but this can be made even harder if you haven’t borrowed any money in the past. The common mistake that’s made is that your credit rating isn’t set as ‘good’ if you haven’t had credit in the past. The catch-22 is that In order for you to build up your credit rating you need to take out credit in the first place, the more you can show examples of paying back credit the better your credit score will be.
For those who are looking for credit for the first time it can be frustrating, often those who are very conscious about borrowing any form of credit it can have an adverse effect on themselves who may later look to take out a larger sum of money ie Mortgage, Personal Loan. You may find that mainstream lenders don’t want to lend to you until your credit report shows that you have borrowed in the past and paid it back on time.
How can first time borrowers improve their credit rating?
There basics ways to improve your credit score. Make sure your name is on the electoral roll and ensure your details are up-to-date with the local authorities. Lenders will use this to carry out an identification check so if it’s not registered on the electoral roll you’re unlikely to get any credit.
Often hinted is to apply for a credit card, this may initially be from a sub-prime lender which will often carry a higher APR rate but the idea is to borrow little and to ensure that you pay back always on time, some credit cards advertise themselves as credit builders but usually all this means is that their criteria for lending is lower than others. The other option you may want to look at is your bank account provider who could facilitate a card card who will often look at your transactions in your current account to make a decision.
Our list of guarantor lender will consider all credit histories and in most cases as long as you have a guarantor with a good credit score, our guarantor lenders will consider you for a loan of various amounts.