I have no credit history, where do I start?

The world of credit building can seem like a confusing place when you’re just getting started. If you've recently turned 18 or if you’ve just moved to the UK, then it’s likely you have very little to no credit history.

Similarly, if you’ve never used credit (like by getting a phone contract), you may find your credit score to be surprisingly low. Loqbox takes a look at what a credit history is, why you need one and how you can make them better!

When you borrow money, take out a credit card, or apply for a mortgage, the lender will likely look at your credit history to see how you’ve managed credit in the past. But what if you’ve never borrowed money or taken out a credit card? What shows on your credit report, how does it affect your credit score, and how can you build your credit history to improve your credit score? Read on for our tips and guidance.

What is my credit history and why is it important?

Your credit history is the evidence of how you’ve managed credit in the past, and this information makes up a large part of your credit report.

You have three credit reports, one with each of the three main reference agencies; Equifax, Experian and TransUnion. They gather all the financial data needed to create: 

  • a record of your credit history
  • your credit report 
  • and then to generate your credit score

Whenever you use credit — whether that’s by borrowing money by taking out a loan, using a credit card, or repaying a mortgage — the lender will be reporting your activity to at least one of these three credit reference agencies. You can read more about CRAs; who are they, what’s the difference and which ones do lenders use, here. And what’s important to keep on top of is repaying what you borrowed, on time, everytime.

When you apply for a credit card, personal loan or a mortgage in the future, the lender usually runs a check on your credit report to see if you’re creditworthy. This impacts on whether they decide to offer you money, how much they can give you, and at what interest rate you’ll have to repay it.This can be difficult if you’ve got a limited credit history.  If you’d like an idea of how healthy your credit report is looking, check your three credit reports using these services (don’t worry, these are free to use and won’t affect your scores to check):

ClearScore (uses Equifax data)*
Experian App (uses Experian data)
Intuit Credit Karma (uses TransUnion data)

*ClearScore gives us a small commission when you sign up for them using this link. Just so you know!

Can I have a credit report with no credit history?

Yes! Your credit report is generated largely by your credit history but if you haven’t yet taken out a credit agreement in the UK to build up your credit history, don’t worry. Your history shows that you’ve never had credit and your credit report will reflect that information, but everyone has to start somewhere! It just means that there’s less information in your credit file and that means you’ll be classified as  ‘thin file’.

The positive news is that if you’ve never had credit, then you’ll have never missed a repayment or used it irresponsibly (these are the cardinal rules of credit building).

But lenders will also have no proof that you’re creditworthy. So actually you’ll still be seen as a risk with no credit history. What lenders want to see is regular and responsible use of credit.

You will have no credit history if you are under 18 years old. This is when your credit history starts. You will also not have a credit history if you’ve recently emigrated to the UK. Credit histories don’t travel, so if you have recently moved to the country you will have to start again, but don’t worry – Loqbox can help you with this.

Can I get a mortgage with no credit history?

It’s possible. Lots of products require a credit check but you could even get a credit card or a loan with no credit history. However, the deals you’ll be offered will be very limited with high-interest rates, so you could find that your debts snowball and your credit history is hurt ultimately anyway! 

Lenders will look at more than just your credit report. Their decision is also based on your affordability – all the information they collect from your application and three months of bank statements will be deciding factors for this.

So yes, it’s possible to get credit with no credit history. But it’s normally best to improve your credit history before getting credit because the right deal can save you £1,000s in the long term.

What if I have no credit history? Is building credit with no credit history possible?

You might be under 18 and looking to get ready for when your credit report starts. Or you’ve moved to the county and need options to grow your credit history. Or perhaps you have limited activity on your credit report, meaning your credit score isn’t as high as you’d like.

If you have no credit history, or a very thin file, don’t worry! There’s always something you can do to make it better. You will need patience. It takes time to improve your credit report and grow your credit score. Here are some things you can do right now to start building your credit history!

Get on the electoral roll and check your details

Registering on the electoral roll helps lenders confirm your identity and address history on your credit report. Make sure your address details are correct because even little inaccuracies can be a problem! A spring clean of your credit report is a great way to make you more appealing to lenders.

Open and manage a bank account

Lenders want to see regular and responsible activity. So open a bank account and start using it (regularly and responsibly!). Set up direct debits or standing orders to pay your rent and bills on time and in full every month. These are all great habits for building your credit history.

Get a Loqbox Save

If you like the idea of building your credit score and a pot of savings at the same time, Loqbox Save may be a great option for you. Starting at £20 per month, save a set amount of money with us, and at the end of the year you’ll get your lump sum of savings back. We report your payments to the credit reference agencies to help improve your score over time. Read all about Loqbox Save here.

Use a guarantor

It’s possible to offset the risk you pose to a lender by finding somebody who is willing to guarantee your loan. They essentially take responsibility for your debt if you can’t pay it. This could be a parent or guardian.

But finding guarantors isn’t easy. As they could seriously hurt their own finances and credit history if you don’t meet your payments, they’ll have to really trust your ability to responsibly pay off the amount you owe.

Take out a credit builder card

There are specific credit-building credit cards which offer low spending limits and high-interest rates. With this, you can build your credit history by using it to make the regular purchases you’d spend on anyway (like your groceries), then set up direct debits to cover the repayments in full each month.

This regular activity will reflect well on your credit history but you need to be careful. If you misuse the card you can find that the cost can escalate very quickly because of the interest!

Get started with Loqbox Rent

If you’re a renter, you’ll understand the annoyance of making large rent payments each month that aren’t helping to build your credit history.

But that can change with Loqbox Rent. No matter if you pay rent to a letting agent, private landlord, local council, or friend, we’ll report your rent payments to Experian to help you build your credit history. It’s just £2.50 a week to get started with a Loqbox membership, giving you access to all our credit-building tools and more!

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Sign up for our monthly emails and we’ll do our best to help you find your way on your journey with money
Give your credit score a boost
For just £2.50 a week, you could see your credit score rise by up to 300 points in the first three months
Get started
Improvements to your credit score are not guaranteed