Credit Score at 18 Watch

Druzion
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Hello all,

So I'm 16 now and have a question I can't seem to find the answer to. I've read various posts about improving your credit score after you turn 18, not taking out more than one credit card for the first few months, etc., however I cannot seem to find any information on what your credit score actually starts at.

So (correct me if I'm wrong), when you turn 18 you don't have a credit score, right? It's not that your score is 0, you just don't have one. Is this correct?

And if it is, I don't understand why any credit card company/phone provider would offer you any form of credit if you don't have a history.
(I know you get credit builder cards where you put down a deposit equal to the amount you want to borrow, but plenty of people seems to get "regular" credit cards after turning 18).

So it's a chicken and egg scenario, you need a credit history to acquire a credit history.

So I guess my question is, how does one gain access to credit with absolutely no history at all?
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Druzion
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I'm assuming banks must just be willing to take on the risk to lend to students with no history.
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byeongkwans
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In my case, I was as confused as you were. When I went to open my student bank account aged 19 (I took a gap year) I was worried about how much overdraft I'd be given due to my lack of a credit score. I've never had a job and so I've never paid any bills or had any regular outgoings.

However, I've had a debit card since I was 13 and that upgraded to an adult account once I hit 18. I used it fairly frequently for small purchases, though I didn't have a lot of savings. Due to this, my student bank account (with the same bank as my debit account) was granted the full overdraft, plus a student credit card.

I definitely wasn't expecting to receive so much. There should definitely be clearer information on how to access your credit score.
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Druzion
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(Original post by chooseanother)
In my case, I was as confused as you were. When I went to open my student bank account aged 19 (I took a gap year) I was worried about how much overdraft I'd be given due to my lack of a credit score. I've never had a job and so I've never paid any bills or had any regular outgoings.

However, I've had a debit card since I was 13 and that upgraded to an adult account once I hit 18. I used it fairly frequently for small purchases, though I didn't have a lot of savings. Due to this, my student bank account (with the same bank as my debit account) was granted the full overdraft, plus a student credit card.

I definitely wasn't expecting to receive so much. There should definitely be clearer information on how to access your credit score.
Cool yeah, I've had a bank account with debit card since I was the same age, and a fair bit goes through it over the course of the year. I guess that means the bank's internal records will show this and I'll get an overdraft when I create a student account.

Do you happen to know what your credit score was when you turned 18? (As in, did you check it before and after upgrading to the student account)
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Reality Check
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(Original post by Druzion)
Hello all,

So I'm 16 now and have a question I can't seem to find the answer to. I've read various posts about improving your credit score after you turn 18, not taking out more than one credit card for the first few months, etc., however I cannot seem to find any information on what your credit score actually starts at.

So (correct me if I'm wrong), when you turn 18 you don't have a credit score, right? It's not that your score is 0, you just don't have one. Is this correct?

And if it is, I don't understand why any credit card company/phone provider would offer you any form of credit if you don't have a history.
(I know you get credit builder cards where you put down a deposit equal to the amount you want to borrow, but plenty of people seems to get "regular" credit cards after turning 18).

So it's a chicken and egg scenario, you need a credit history to acquire a credit history.

So I guess my question is, how does one gain access to credit with absolutely no history at all?
You're partially right.

Yes - you cannot enter into credit agreements before 18 years old so, necessarily, you don't have a credit reference file at somewhere like Experian. But that doesn't mean you have no history about how you run bank accounts etc - most people have a bank account before 18 years old, and the way you run that account is very important. If the account has been run well, with regular credits, no bounced payments etc, your bank is likely to offer you a 'starter' credit card once you have a regular income being paid into the account. Even though they haven't got a 'credit file' as such to go on, they still have some data on you as a general banking customer upon which they can base a decision.

Of course, once you have a card, you start to acquire a credit file. The same is true if you take out a pay monthly mobile phone contract, or get an overdraft from your bank. For students, their student finance and student bank account is usually the first access to credit, because they come with an overdraft and, often, a credit card.
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Druzion
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(Original post by Reality Check)
You're partially right.

Yes - you cannot enter into credit agreements before 18 years old so, necessarily, you don't have a credit reference file at somewhere like Experian. But that doesn't mean you have no history about how you run bank accounts etc - most people have a bank account before 18 years old, and the way you run that account is very important. If the account has been run well, with regular credits, no bounced payments etc, your bank is likely to offer you a 'starter' credit card once you have a regular income being paid into the account. Even though they haven't got a 'credit file' as such to go on, they still have some data on you as a general banking customer upon which they can base a decision.

Of course, once you have a card, you start to acquire a credit file. The same is true if you take out a pay monthly mobile phone contract, or get an overdraft from your bank. For students, their student finance and student bank account is usually the first access to credit, because they come with an overdraft and, often, a credit card.
Ah right thanks, that explains it. So they lend to you on the basis that they know your banking history, as opposed to just checking your credit rating, and then I guess from there you start t build up a history that other organisations can check and base their decisions from.
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Reality Check
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(Original post by Druzion)
Hello all,

So I'm 16 now and have a question I can't seem to find the answer to. I've read various posts about improving your credit score after you turn 18, not taking out more than one credit card for the first few months, etc., however I cannot seem to find any information on what your credit score actually starts at.

So (correct me if I'm wrong), when you turn 18 you don't have a credit score, right? It's not that your score is 0, you just don't have one. Is this correct?

And if it is, I don't understand why any credit card company/phone provider would offer you any form of credit if you don't have a history.
(I know you get credit builder cards where you put down a deposit equal to the amount you want to borrow, but plenty of people seems to get "regular" credit cards after turning 18).

So it's a chicken and egg scenario, you need a credit history to acquire a credit history.

So I guess my question is, how does one gain access to credit with absolutely no history at all?
Also, note that a Credit Score, doesn't really mean anything. Each lender has their own score, and their own criteria for the type of customer they're looking for. There's no such thing as a 'single' credit score - the Experian produced one is just a general guide. Also, people with a 'perfect' credit score often get turned down for credit products like credit cards, because they are the sort of customers which don't make the card companies any money!
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Druzion
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(Original post by Reality Check)
Also, note that a Credit Score, doesn't really mean anything. Each lender has their own score, and their own criteria for the type of customer they're looking for. There's no such thing as a 'single' credit score - the Experian produced one is just a general guide. Also, people with a 'perfect' credit score often get turned down for credit products like credit cards, because they are the sort of customers which don't make the card companies any money!
Yeah, so I've read.
But obviously the only data they can use if you haven't banked with them before is the 3 credit reference agencies scores (and being on the electrol roll and whatnot).
So would it be worth checking out the best (highest overdraft/most facilities) student accounts now and opening a bank account now with whoever I plan to be when I turn 18? It would give me a better reputation with that bank right so I've got a lower chance of being rejected for credit than if I just moved over ti them at 18.
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Blue_Cow
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(Original post by Druzion)
Yeah, so I've read.
But obviously the only data they can use if you haven't banked with them before is the 3 credit reference agencies scores (and being on the electrol roll and whatnot).
So would it be worth checking out the best (highest overdraft/most facilities) student accounts now and opening a bank account now with whoever I plan to be when I turn 18? It would give me a better reputation with that bank right so I've got a lower chance of being rejected for credit than if I just moved over ti them at 18.
Not necessary. Plenty of people get accepted for student 0% overdrafts despite being a first-time customer.
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Reality Check
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(Original post by Druzion)
Yeah, so I've read.
But obviously the only data they can use if you haven't banked with them before is the 3 credit reference agencies scores (and being on the electrol roll and whatnot).
So would it be worth checking out the best (highest overdraft/most facilities) student accounts now and opening a bank account now with whoever I plan to be when I turn 18? It would give me a better reputation with that bank right so I've got a lower chance of being rejected for credit than if I just moved over ti them at 18.
Not really. If you're going to be a student, with normal student finance, then so long as you don't have any negative information recorded (such as fraud), the lack of any credit information is irrelevant to whether or not you'll be offered the normal student banking package. All students are in this position, so opening an account with a bank before converting the account to a student one and applying for credit is unnecessary (it wouldn't hurt, though).

Are you concerned about your ability to access credit once you turn 18? You seem somewhat preoccupied with it.
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Druzion
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Ah cool thanks, both of you.

And I'm not really concerned, just interested really.
Just wanted to make sure that I didn't/don't make some sort of mistake now that could limit my options in the future, but yeah wou're right all students are in the same position really and get the overdrafts just fine.

Thanks for your help!
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Reality Check
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(Original post by Druzion)
Ah cool thanks, both of you.

And I'm not really concerned, just interested really.
Just wanted to make sure that I didn't/don't make some sort of mistake now that could limit my options in the future, but yeah wou're right all students are in the same position really and get the overdrafts just fine.

Thanks for your help!
You're welcome
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