If you’re new to the UK, you won’t have a credit history which means lenders have no way of assessing how reliable you are as a borrower. Even if you had a healthy credit report back in your home country, this won’t transfer across to the UK, meaning you’ll need to start over. This also means getting a credit card can prove tricky.
No matter how good or bad your credit score was back home, when you move to the UK, you’ll be starting from scratch. To be able to access the best rates on financial products like credit cards, loans and mortgages, you’ll need to build your credit history in the UK.
To help you do this, there are a number of steps you can take:
To be eligible for a credit card, you will usually need to meet the following criteria:
However, even if you do meet this criteria, this doesn’t mean you’ll automatically be accepted for a credit card.
When you apply for a credit card, the lender will carry out a credit check to see how reliable you are as a borrower. If your credit score is low or you have little to no credit history, your application is more likely to be rejected.
Fortunately, there are credit cards that are designed specifically for those with poor credit scores and no credit history. These are known as credit builder credit cards and, as the name suggests, they are designed to help you build your credit score.
However, you’ll need to be aware that credit builder cards tend to have high rates of interest, so you’ll need to try to pay off your balance in full every single month. Credit builder cards also tend to have low credit limits, although this can increase over time.
Provided you stay within your credit limit and make your repayments on time each month, a credit builder credit card can help you to improve your credit score. This means that you should later be able to apply for more competitive deals.
Before applying for a credit card it is sensible to use an online eligibility checker as this will show you the cards you’re more likely to get accepted for without hurting your credit score.
If you leave the UK for an extended period of time, your credit rating won’t go with you. Instead, your credit score will drop and the longer you’re away, the lower it will go. This means that when you return to the UK you will have to start from scratch.
For this reason, if you’re planning to return to the UK to stay at some point, it can be a good idea to keep some of your bank and credit card accounts open and active. Just remember to keep an eye out for fraudulent transactions and any fees or interest that may be charged.
Also keep in mind that you must repay any debts before you leave the UK – if you don’t, this will have a negative impact on your credit score and could result in you being issued with a County Court Judgment (CCJ).
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