I am a student applying for my very first credit card in an effort to improve my credit rating.
I have lived at several addresses over the past few years, but I consider my parents’ home to be my “permanent address” even though I am in college six months a year now.
How do I complete my application? Should I use my home address or my university address, and what should I do when the app requests my household income and rent payments? – NR
Confusion: If you are a student applying for a credit card, some of the application options may be difficult to understand the first time around.
George Nixon, it’s money, answers: Your first loan application is often a particular trap.
This is because lenders tend to use your credit history to determine whether or not to lend you credit, and to have a good credit history you need to demonstrate that you are a creditworthy borrower.
But the sooner you try to solve this puzzle, the better, otherwise you run the risk of ending up like those well-publicized “invisible mortgages” who are turned down for bad credit loans because they have no mortgage history. credit.
While in an age of open banking and greater data sharing, the major credit reference agencies aren’t quite the only gatekeepers they once could have been, there is still a lot to be said about. pulling out a credit card, using it a bit, and sticking to repayments to build your credit history.
It is possible that if your credit history is a blank page, you may not get the first credit card you apply for, or you may have to settle for a “ credit builder ” card or ‘a card with a higher interest rate, but that’s okay as long as you pay it off.
This is Money has used some credit cards before, which may be an option for newbies here.
Being in college when you apply leaves you with a lot of other issues as well, especially if you’re splitting your time between college and coming home on vacation.
What address do you indicate, do you describe yourself as a tenant or living with your parents, do you include your student loan in your household income?
According to the credit report provider TotallyMoney, when it comes to your address, you should choose the one where you have the most credit history.
While you might think you might not have a lot if you apply for your first credit card, have ever registered on the voters list, opened a bank account, purchased a cell phone contract, or used something like Klarna, then you will have a credit history at any address you provided on these applications.
Comparison website MoneySupermarket and credit card provider American Express also recommended using the same address you used if you registered on the voters list.
If you are not sure what any of these may be, you can check your actual credit report to see where they were saved.
This is Money has already covered how to check your credit report and what to look for when checking your “financial resume” for the first time.
If this ends up being your home address or that of your parents, you should describe yourself as living with your parents.
When it comes to sections on household income or accommodation costs in the form of rent while you’re in college, some lenders will count student loans and grants as part of your income, according to Totally Money.
It’s also possible that, given the relatively small amounts you receive from student funding, compared to a salary from a full-time job, you may not qualify for many traditional credit cards.
Keep it short: some lenders, especially those that offer student credit cards, may initially limit the amount you can accumulate on your card.
However, you can do something called “soft research” or use an eligibility checker to see what your odds are based on the numbers you provided, which doesn’t affect your credit score.
This means that you might be better off trying a student credit card, if your student bank account provider offers one.
According to personal finance site Moneycomms, HSBC, NatWest, RBS, and TSB currently offer credit cards specifically for students, as long as you use them in banking.
This is Money previously covered the best student bank accounts in August around the time of A Level Results Day.
Cards often come with fairly low credit limits, which isn’t surprising, and given the large interest-free overdrafts, you can get a much better idea of using those first than looking for your credit card.
Instead, consider using it for those small, regular purchases you make, like gasoline.
This way you can build a story without incurring any cost which hopefully means that by the time you finish your studies you will be in a situation where you can get a lot more credits. great sources.
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