What do I do if I don’t have any mature credit accounts?
Building a solid credit history takes time and ironically you need a credit history to get credit. Although it does take time, if you manage your credit responsibly, your credit score will ultimately get better.
Unfortunately, if the credit bureaus do not have enough information to paint a picture about your payment history, your credit report will be thin, and your score could reflect this. The main thing is that you need to be patient and methodical in your handling of your credit so here are some tips to building a solid credit history foundation:
1. Don’t close your credit accounts
Believe it or not, but credit scoring systems can penalise you for closing credit accounts. This is because they don’t want to see you taking out multiple credit cards, using them for a while and then closing them to take out a new one. The best thing to do is to stick to one or two credit cards and use them responsibly. By closing your credit accounts, you decrease the average age of ALL your credit accounts and the credit rating models will penalise you for this.
2. Be on time with your credit card payments
One of the most effective ways of creating and maintaining a good credit history is to ensure that you make your credit card payments on time. With a Virgin Money credit card, you can set an automatic payment for an amount that you select. This will help to make sure that you’re not accidentally missing a payment.
3. Don’t have too many credit accounts at once
Don’t apply for too many credit accounts once you have access to credit. Whenever you apply for a new line of credit, there is a hard enquiry done on your credit report and this will negatively affect your credit score.
4. Setting reminders for payments and paying your bills more than once a month
Write down your payment deadlines and set reminders on your phone so that you are consistently paying your bills on time. Plus, if you can, pay your bills every two weeks, rather than just once a month. Your credit score will improve, as you are lowering your credit utilization.
5. Make sure you check your credit score and credit report regularly
Virgin Money has a free, handy tool that will get you a copy of your credit score and your credit report. Reviewing your credit report is a good way to check that all the information is correct, and you will be able to see where you have room for improvement in terms of your credit utilization.