Home Business Insights & Advice How to build your credit score after moving to the UK

How to build your credit score after moving to the UK

by Sarah Dunsby
18th Oct 23 3:10 pm

Whether you’ve moved to the UK in search of better job opportunities or a better quality of life, you’ll have to embrace the country’s financial system if you’re looking to settle down. This includes getting to grips with banks, PAYE tax and credit scores. If you’re unsure about the last one, this article is for you.

What is a credit score?

Your credit score is essentially a reflection of how well you’ve managed money in the past and how attractive you are as a borrower to lenders. It’s based on your credit history which is a record held by organisations called credit reference agencies – the main three in the UK being Experian, Equifax and TransUnion.

These organisations keep records of all the times you’ve borrowed money in the UK and whether or not you’ve paid it back, no matter if it was for a phone contract, credit card, loan or anything else. If you’ve got a healthy financial history, your credit score is likely to be higher and you’re more likely to be accepted for credit or loans in the future.

How do credit scores work for people moving from abroad?

UK citizens will have built a credit history throughout their lives, but people immigrating from abroad won’t have the same privilege. The bad news is that, even if you have a great credit history in your native country, you can’t benefit from it here and you’ll essentially have to start from scratch.

Any person moving from abroad is likely to be regarded as a “high risk” applicant and either won’t be accepted for loans, mortgages and other borrowing or will have to swallow extremely high interest rates.

If you’re new to the UK, the only answer is to build your credit history over time by demonstrating that you can borrow and make repayments reliably. But there are also a few things you can do to help the process, as you’ll find below.

How can I build credit history in the UK?

Building a credit history with reference agencies takes time, patience and a fair bit of attention to detail. You’ll need to do many of the following steps as soon as you can:

  • Settle down at a fixed UK address – Lenders like stability, so it’s important to get a permanent UK address as quickly as you can. Staying at the same address for a while helps credit agencies to prove your identity and collect evidence of your borrowing habits, although you need to update all your accounts with the right address.
  • Register to vote – If you’re eligible to vote in the UK, being on the electoral roll further assures lenders of your identity and address, which are important to appear trustworthy.
  • Open a UK bank account – Once you’ve got a UK address, you should be able to open a bank account to help you receive earnings and pay bills. Again, these records help to accumulate evidence that you’re reliable with money.
  • Pay bills in your name – Any utility bills, subscription services, phone contracts, gym memberships and anything else should be in your name and registered to your permanent UK address. Any differences between details on accounts can cause confusion and make you seem less reliable.
  • Get a mobile phone contract – Phone contracts count as credit, so taking one out when you can is a good step to build your credit history – presuming you make your payments on time.
  • Apply for a credit card – This may be difficult, but spending on a credit card and repaying reliably is one of the clearest ways to show you’re a responsible borrower. Be careful and use it wisely because not making repayments will harm your credit score.

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