Accessing Credit is the Start to Building a Credit History


The days of easy access credit have long disappeared. Many people now struggle to access credit facilities such as credit cards, loans, mortgages, store finance, mobile phone contracts and even insurance deals.

With sources of credit now restricted to all but the most ‘prime’ customer segments, it creates difficulty for many people to even build a credit history in the first place. If we look at even the most sub prime credit cards, the rejection rates are incredibly high. For example, 83% of applications for the Vanquis credit card are rejected.

The key to obtaining credit is to ensure that your credit profile is ideally matched to the creditors requirements. Therefore, you should certainly check your personal credit report to see how your credit record shapes up.

Some lenders will state exactly the type of customer they are looking for. If, after checking your credit report, you decide that you fit into the creditor’s desired customer profile, then you may be successful in applying for credit with them. However, there is an element of risk in doing this. It is possible that you may not have made a correct assessment of your credit file in comparison with the lenders requirements, thus meaning that your credit application gets rejected. The fact that you have applied for credit will be stamped on your credit report. If other lenders subsequently see that you have recently applied for credit elsewhere within a short period of time, it is likely that this information will be used to classify your credit risk as being slightly higher.

If you do decide to go down the route of managing credit applications for yourself, you should always look to see if you can undergo a quotation search first, rather than undertaking a full credit application. A quotation search will let you know whether or not you will be granted credit, but most importantly, it does not leave any sort of footprint on your personal credit report. If you receive any rejections for credit via quotation searches, you won’t have problems with your credit score being reduced.

Another route you could look to go down is using the services of a loan broker. Brokers have knowledge and experience of what creditors are looking for in terms of customer profile. Loan brokers can also ensure that you get the best possible deal for credit. We have provided a link to such a loan broker on the right hand side of this page.

With the number of IVA’s (Individual Voluntary Arrangement) and bankruptcy cases on the increase, there is a growing population in the UK that are unable to get a traditional credit or debit card, without paying extremely high fees. Also, not all people actually want a credit card or loan at the present time. Despite this, it is still possible for people to build a credit history. This is due to pre-paid cards being available which actually file credit information to the credit reference agencies.

With pre-paid cards you are loading your own money onto the card, and the card issuer is not lending you any money. However, some pre-paid cards structure things in such a way that you are loaned a years worth of fees in advance. You then pay these fees off in monthly instalments. This information then gets filed with the credit reference agencies. It is worth noting that not all pre-paid cards offer this functionality. However, a pre-payment MasterCard that does offer this functionality is the Cashplus Creditbuilder card. They actually file your payment information with both Equifax and Experian.

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Want to order a personal credit report service: Use the links below to place your order with Experian & Equifax:

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Equifax UK Avoid nasty surprises with any credit applications. Signup with Equifax and view your Equifax Credit Rating: View Equifax Credit Score!

The Credit Agency UK LEARN more about Credit Reports, the way lenders use them and how to Improve Your Credit Score: Personal Credit Report Articles !