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How do you get credit for the first time?

Most people know that when you approach a lender for credit, whether it's a loan or a credit card, they'll take a careful look at your credit history before making their decision.

If you're a new borrower looking to take out your first loan or credit card, find out how you can get a first–time loan, even with no credit history.

If this is the first time you’re applying for credit, you may not know where to begin, as the process of applying can seem like somewhat of a daunting experience and you might worry that you’re lack of a credit history means you’ll be rejected. But this needn’t be the case.

Establishing credit for the first time and applying for a credit card with no credit history can be a daunting idea. If you’re approaching a lender as an unknown quantity, with no record of having responsibly paid cash back before, there’s always a risk of rejection. Not only can this be a frustrating experience, but it can also have a costly knock-on effect. Unfortunately, a record of multiple rejected loan and credit card applications can make it even more challenging to secure the funds you need.

However, there are steps you can take to improve your chances of success as a first-time borrower, meaning you can get access to the funds you need without having a credit history. Follow the advice outlined below to start building a healthy credit score. Learn how to overcome some of the main challenges and find out what lenders are really looking for from new and existing borrowers.

What is credit rating?

You may have heard the phrase ‘credit rating’ or ‘credit score’ before. This informs potential lenders of how reliable you might be as a borrower. A low credit rating will make it more challenging to secure a personal loan, mortgage, credit card or other type of loan product. Conversely, a high credit score, combined with documented proof that you have the means to pay back a loan, will make approval far more likely. Lenders use different credit scoring companies to check your credit rating. However, all of them hold similar information about you and your financial history.

How to establish your credit history

To begin, check your own credit score for free online. Once you know your starting point, you can set about improving it. Even if you’ve never borrowed money before, there are ways to improve it. For example, if you have a mobile phone contract, make sure you pay your bill on time every month, setting up a direct debit to ensure you never miss a payment.

Another way to boost your credit score is to make sure as many household utility bills as possible are in your name, ensuring they’re paid on time every month. This tells the credit scoring company that you can manage your finances well, pushing your score a little higher.

One other relatively easy task is to make sure you’re registered to vote at your current address. You can do it online or by post and, if you’re living in the UK, all you’ll need is your National Insurance number. Once you’re on the electoral register, your credit rating may improve.

Having followed these steps, it’s a good idea to check your credit rating again to see if they’ve had an impact. At the same time, make sure there are no errors on your report. For example, a wrong address or missing information can be detrimental to your overall score. So too can any outstanding debts, so clear these before you apply for further credit.

How to get credit for the first time

Although it can be challenging to get credit for the first time, there are ways you can dramatically increase your chances of success. For example, if you have a family member willing to act as a guarantor for your loan, this can be a great way of securing that first chunk of credit.

Alternatively, if you can afford the repayments, you could opt for a loan with a higher interest rate. Lenders may charge unproven borrowers more interest to borrow the same amounts as those with long credit histories and solid credit scores, as they are viewed as a higher risk. This can be one route to establishing an initial credit rating, which you can work to improve in the future. Once you’ve borrowed a little and repaid the amount responsibly, you can use other methods to proactively build your credit score.

Taking out a credit card and repaying it in full each month or successfully servicing a small personal loan over a period of time will strengthen all types of future credit applications, from financing a car and career development loans to mortgages. Use our loan calculator to get an idea of what you could pay each month with your first loan.


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