How to get a credit card in UK? do I even need one?

I had two-three credit cards in India. (Citi, HSBC, and ICICI), they were quite useful because of offers and credit limits. And they were useful because they were building a credit history as well.
However, I applied for a credit card here, but I couldn't get one. was refused as they don't have enough data on me, AKA a 'thin file'.
Questions:
1. How to get a credit card if I have lived here for one year and have no credit history.
2. Is it even useful to get a credit card here? (Except this one use-case where I need to get a car on rent here).

Thanks

You don't need a credit card to hire care. You can hire a car with a normal debit card.

Likely you would only get one of the high Apr cards, if at all, until you build a credit profile. Even if you got a credit card, your credit limit will likely be low.

inboxdarpan1 wrote: ↑

Tue Dec 15, 2020 3:15 am

I had two-three credit cards in India. (Citi, HSBC, and ICICI), they were quite useful because of offers and credit limits. And they were useful because they were building a credit history as well.
However, I applied for a credit card here, but I couldn't get one. was refused as they don't have enough data on me, AKA a 'thin file'.
Questions:
1. How to get a credit card if I have lived here for one year and have no credit history.
2. Is it even useful to get a credit card here? (Except this one use-case where I need to get a car on rent here).

Thanks

When you first come to the UK, you are "unknown" to financial institutions. It means you may struggle to get a phone on contract, a credit, a store card and sometimes even utility providers (gas, water, electricity...) may force you to open a prepaid account. I went through that all when I came to the UK.

There are credit cards meant to build credit score. Google that. These cards are prepaid. It means you fill them each month and use the balance. But still they show in your credit score as any other card would show. Use that for a few months, then get a cell phone on monthly contract... This will help further building your score. It will probably take you a year or two to start having a decent credit score.

Always pay on time. If you default on a payment, the incident will stay in your file for 6 years!

Sign up for free Experian account and keep an eye on your credit score. Don't apply for more cards than needed, especially until your score is in excellent or good rating.

FYI, if your bank account or credit card application gets rejected your score will go down due to hard search entries on your file.

Experian has credit boost option to link your regular direct debits/payments to your score, so you could explore that as well. Read well on these things before you make your next application for credit or bank account.

Do the same for your spouse if married. Start early to build up, otherwise you & your spouse will have same credit issues due to thin file.

Before you sign up for Experian account get the statuary credit report from them first to see what Experian hold on you. Once you know they have basic info, i.e. your address, etc. then open Experian account.

Make sure you are on electoral rolls register, btw.

Zerubbabel wrote: ↑

Tue Dec 15, 2020 8:20 am

inboxdarpan1 wrote: ↑

Tue Dec 15, 2020 3:15 am

I had two-three credit cards in India. (Citi, HSBC, and ICICI), they were quite useful because of offers and credit limits. And they were useful because they were building a credit history as well.
However, I applied for a credit card here, but I couldn't get one. was refused as they don't have enough data on me, AKA a 'thin file'.
Questions:
1. How to get a credit card if I have lived here for one year and have no credit history.
2. Is it even useful to get a credit card here? (Except this one use-case where I need to get a car on rent here).

Thanks

When you first come to the UK, you are "unknown" to financial institutions. It means you may struggle to get a phone on contract, a credit, a store card and sometimes even utility providers (gas, water, electricity...) may force you to open a prepaid account. I went through that all when I came to the UK.

There are credit cards meant to build credit score. Google that. These cards are prepaid. It means you fill them each month and use the balance. But still they show in your credit score as any other card would show. Use that for a few months, then get a cell phone on monthly contract... This will help further building your score. It will probably take you a year or two to start having a decent credit score.

Always pay on time. If you default on a payment, the incident will stay in your file for 6 years!

I have done that, I did soft check on these credit cards and I was not eligible despite having enough income. I guess it was because I was not registered on electoral roll and I have lived here for 1.5 years only. I even tried Vanquis but to no avail, I don't even qualify for that. I have utility bills on my name and have a Monzo account.

inboxdarpan1 wrote: ↑

Fri Dec 18, 2020 3:30 am

I was not registered on electoral roll

You can register onto the Electoral Roll if you are a citizen of a Commonwealth country living in the UK on a non-visit visa. Going by the flag on your profile, I think you should register.

Do you have an overdraft on your current account? It may be worth asking your bank for overdraft facilities, typically on your salary account, and using it judiciously and sparingly.

While having a credit card is not necessary, it can be helpful in many situations. In particular:

When hiring a car, if you use a debit card the deposit/excess is blocked in your account. That means that if you have £1000 in your bank account, and the deposit/excess is £500, you can only use up to the remaining £500, until the car is retured in good condition, and the amount "blocked" on your card is released.

When shopping, if you buy anything between £100 and £30000, you can take advantage of Section 75 of the consumer credit act, which means that if something goes wrong with your purchase (and it applies equally to goods and services), the credit card company is jointly liable with the seller, and if you are unable to get a refund from the seller (e.g. they have gone out of business), you can request a refund from the credit card company.

A good source of information about credit cards, credit scores etc. in the UK is https://www.moneysavingexpert.com/

I hope this helps.

You can open a Transferwise Borderless Account (or whatever it's called nowadays) and you'll get a Mastercard debit card in as many currencies as you need, including GBP.

EDIT: It's now called "WISE multi-currency account" but it's the same thing as above.