Lion in Winter

After spending most of my adult life to date as a US resident, building a UK credit rating meant starting from scratch. I have gas/elec, Internet, mobile, on electoral register, personal and business bank accounts. I just applied for and received a credit card with a decent credit limit through my bank. My Transunion credit rating is now at the very top end of "OK" - but my recently acquired credit card has not yet been factored in as far as I can tell (it has been less than 30 days and I haven't even received the physical card yet). So, questions are:

• Once the credit card appears on the report will that alone top me into "good"?
• I do plan to use the card and pay in full as I go. Will that also improve the score here or do I actually have to have "debt", such as a larger purchase, that I then pay off?
• Does a Loqbox account actually improve credit in my circumstances, given that I do have a real credit card?
• OH - can we improve his rating by adding his name to my card?
• OH - will adding his name to the utilities improve his rating, ditto him getting a Liqbox account?
• Anything else I should do?

Thank you!

durham_lad

I really don't know the answers to your questions but was in a similar position when we moved back in 2016. I will say that since we've been back we have never held any debt at all, and always pay off our credit card every month - never carry a balance. My transunion credit score is "Excellent" (just checked) but I don't know how long it took to get there. We own our house with no mortgage having bought it with the proceeds of the sale of our house in the USA.

I like this site for a good guide to building a credit report.


https://www.moneysavingexpert.com/lo...-credit-score/

I did sign up to MSE's totally free Credit Club some years ago and can recommend it.
https://www.moneysavingexpert.com/creditclub/

Lion in Winter

I'll check both the links, thanks.

Everything that I have to pay, I pay on time. I see the Water company reports, but not the Energy, strangely. I am paying rent, so maybe I'll use one of those services to make that reportable.

I now have the credit card in hand but it's not yet showing up on Transunion. Maybe it takes a month, or me using it, or both. I don't know.

durham_lad

I would definitely start using the credit card, paying it off every month.

Lion in Winter

Yes, will definitely do that.

I imagine the credit agencies update their stuff monthly, and not more frequently than that, so with any luck things will have improved in July.

durham_lad

yes, I don’t imagine they will routinely update their records and ratings more often than monthly.

Lion in Winter

Follow up question - how long do you feel I should give it before applying for any other credit line? A year? I don't want/need the debt, I just want to raise the ceiling a bit.

durham_lad

I really don’t know. I only have the one UK credit card, from HSBC, (and still have 2 US credit cards which won’t be counted on my UK credit score). I don’t have any other debts or credit lines at all so my “excellent” score of 888 is purely from paying off that one card every month, and paying all council tax and utility bills on time.

I had a weird situation last year when HSBC issued a new cash rewards card that I wanted so I applied online, HSBC is also my bank of many years and I am a “Premier” customer. It required uploading proof of income and after a day or so I received a message telling me that I needed to call them to progress this. I called the number on the back of my existing credit card and was connected to their credit department who said that the problem is that nearly all of my income comes from US pensions. I pointed out that they advertised themselves as “the world’s first global bank” and can’t convert USD to GBP? To cut a long story short I told them that my existing card with them which I applied for and got 7 years earlier was no longer a rewards card and had a credit limit of £11,000 so why can’t they simply move most of that over to the new card since I don’t intend to continue to use it much. The agent went off to discuss the issue with his manager - I offered to provide copies of my HMRC tax returns since they seemed capable of currency conversion and would provide proof to HSBC of my income in GBP. He called me back 10 minutes later and said that keeping my existing total credit limit with them would work so that is what they did. So, I do actually have 2 cards now, both with HSBC, and only one of them has my automatic bills on it (Netflix etc). At least now if I lose my main credit card or it is compromised I won’t have to contact those automatic payment vendors.

tdrinker

Don't get too hung up on your credit score provided you have a decent score, as having an even better score probably makes no difference. Plus, you don't really have a score as each credit agency will evaluate you differently, and it isn't the score itself that determines acceptance or rejection of credit, it's just an indication of where you stand. A history of, or even a single, default can seriously hurt your chances, though. Avoid unauthorised overdrafts. Anything that makes you look financially desperate or a non-payment risk will alarm lenders. This can include gambling, I recently saw a report saying it can impact your chances of getting a mortgage because it signifies risk to lenders.

I check my rating occasionally with different agencies and am often good on one and excellent on another, despite them both having the same data. I don't believe there's any merit is upgrading to a paid service, nor would I give a credit rating agency access to my bank account, supposedly to monitor and improve my credit score by in reality to harvest my data for onward sale. I recall reading a Sunday Times article from a financial journalist who was very anti-credit agencies, recommending you don't sign up to them as they are all about collecting your data for sale, but if you want to keep an eye on your credit score what choice do you have?

Using a credit card will help build your credit history. It's always good to have two credit (and debit) cards, with one as a backup as they are occasionally blocked, often for an innocuous reason; it can cause inconvenience or embarrassment if you don't have an alternative payment method. I've set up direct debits to pay my entire balance monthly.

I inadvertently used a credit card not a debit card to withdraw cash from an ATM, and my credit score dropped for a while (it gives the appearance of financial desperation), but not hugely and it was restored reasonably soon. It's the same when I've used a credit card overseas to withdraw cash - it was cheaper even with interest to use a zero fee credit card than a fee charging debit card, although it might be different now the interest rates have increased. I've also found my score has dropped a little for no apparent reason, so don't panic if this happens. Possibly they've just updated their evaluation methodology and it's unrelated to anything you've done.

Lion in Winter

Sure. I had an excellent rating in the US, but after decades there I had zero UK presence of any kind, so starting from scratch. Just looking for ways to speed that up.

tdrinker

You could check your score with Experian and Equifax (can also get this via a free ClearScore account) to see where you stand with the other agencies. This will give you a better overall picture are and alert you if one gives you a low score, so you can investigate why lest they have are holding inaccurate information. Otherwise, you appear to be doing pretty well already.

Btw, spend on the credit card, but not consistently to its limit which would look like you have uncontrolled spending.

Lion in Winter

Yeah I think overuse of the credit line works the same both sides of the Atlantic. Good idea to check the other agencies.

I can't really think of anything else to do. I may apply for another card, but not for six monthsxat least. I don't need a car loan or anything liike that.

tdrinker

You're doing the right things, and there may be nothing you can do to speed the process. It's one of those frustrating things in life, you know who you are but find yourself having to prove yourself to others, or in this case an algorithm, which takes time.

One thing to watch is that if you set up a direct debit payment for your credit card (you can choose the date of payment), it may not be taken on exactly the same date each month - I've never understood why, but payment can be taken a day or two each month. So if you line up the direct debit payment to match a day when income arrives, set up the payment a couple of days later lest it's taken early and makes you overdrawn. The day my direct debits are taken seems to vary less now that it used to, or seem to go only later but not earlier, so maybe the banks (or at least, mine) are finally resolving this. But I do remember an occasion many years ago when the bank took the payment early thereby making me overdrawn, charged me an unauthorised overdraft penalty, then sent me a letter and charged me for that too. I felt like I'd been mugged. Luckily, they refunded me after I complained.

Lion in Winter

Good to know, although I do try now not to run the account that low. Back when the margins were very fine indeed, I didn't set up any automatic payments since I had to have exact control to the day when bills would be paid. Luckily I'm a little more solvent these days.

I'll see if anything improves next month when the credit card should appear on my report.