How does credit work in the UK?

Not sure if this is the correct forum?

How does one apply for credit in the UK? How does one move and purchase a car or a house or get credit cards? What do I need to know prior to coming the UK?

It's really tricky since you have no credit in the UK and they won't/don't use your US credit reports.  When we first got over, NHS (husband's employer) had worked with a bank (Natwest) to get us all an account.  As we were opening the account, they handed us a credit card application to fill out.  About 2 weeks later, we got a piss-off letter and denied a credit card since we had nothing on our credit report in the UK.  So we called the bank and they said to reapply.  We did and they finally issued us a credit card with a limit of £250.   Well as you know, that isn't going to get you very far.  But we would charge things and then pay them off immediately to build up a credit history.  After 6 months, they upped our credit limit to £3500.  So you have to go slow and work with them and be patient.  Otherwise, just bring lots of cash with you!

So is selling our house in the states and thinking we can purchase in the UK right away an unrealistic goal? Do we need to have enough cash to purchase a car or can is it hard to get a car loan as well?

I am trying to prepare as much as I can for a move in a year. I really appreciate the information you all provide in this forum.

Thank you all

It really depends on how much cash you're talking about - and what sort of job you'll have here in the UK.  Just as in the US, the more you have/earn, the easier it is to gain access to the property ladder.  As far as cars go, I'd never purchase new, so I can't really help you on that matter.  Reliable used cars are very easy to find and quite cheap as well - our '96 VW only has 47K miles on it, and we paid £1300 cash for it!

How does one apply for credit in the UK? How does one move and purchase a car or a house or get credit cards? What do I need to know prior to coming the UK?

Same as in the US, you fill in an application, and wait to see if it's approved.
Chances are, though, that until you can prove a UK address for 3 years, you will be denied credit.

For mortgages, lenders will also take into account what visa you are on and how much longer you have left on it.  Because I am here on a work permit, even though my partner is English, we had fewer options as far as lenders for the mortgage.  Not impossible, but just more restrictions, higher deposit or slightly higher rate, that kind of stuff. 

Ok I am getting a better picture of what to expect. My wife is applying for citizenship so I guess I will be on a spousal visa. I guess we will plan to rent a house for a while and build up credit as we go.

Why are used cars so cheap in the UK? Any particular reason? Or is it just supply and demand?

Hi Sagetim,

Logistically, many things you'll need here are the same as in the USA, and that includes mortgage applications, loan applications, credit cards, house buying processes, getting utlitities sorted etc etc ....

There are 'variances' of course, as what Karin pointed out - have a read through posts here on this website for people who've done it before.

Internet is one thing you cna have right away - mobile as well! so you won't need to get a geographic line from the likes of BT or the cable operators. Look at '3' mobile pay as you go internet - £10 per month - no credit checks etc - (I think the USB modem/dongle is £100 to buy from the '3' shop though - look on ebay for cheaper) so as soon as you land you can be online checking out allsorts of information for the other logistics you'll need.

As for you're house, well that's a hotly debated subject here! - without knowing how much approximately your USA house is, it's hard to say if you can buy here right away - I mean you may be living in a million dollar home - and you may have $500,000 equity - that'd be around £250,000 here which means yes you would be able to buy a home rightaway - especially if that £250K here was say a 50% deposit on a £500,000 UK house! - also depends where in the UK you'd be looking at, in central london, that £500K would buy you an apartment only!

Cars - again, on what criteria are you basing 'why are used cars so cheap here?' - depends which make, model etc etc...  supply/demand does come into it as well as well do a multitude of other factors....

If yer want to elaborate a little more, then certainly me and other posters can respond with more focussed responses to help you.


cheers! DtM! West London & Slough UK!

Hi Sagetim,

Logistically, many things you'll need here are the same as in the USA, and that includes mortgage applications, loan applications, credit cards, house buying processes, getting utlitities sorted etc etc ....

There are 'variances' of course, as what Karin pointed out - have a read through posts here on this website for people who've done it before.

Internet is one thing you cna have right away - mobile as well! so you won't need to get a geographic line from the likes of BT or the cable operators. Look at '3' mobile pay as you go internet - £10 per month - no credit checks etc - (I think the USB modem/dongle is £100 to buy from the '3' shop though - look on ebay for cheaper) so as soon as you land you can be online checking out allsorts of information for the other logistics you'll need.

As for you're house, well that's a hotly debated subject here! - without knowing how much approximately your USA house is, it's hard to say if you can buy here right away - I mean you may be living in a million dollar home - and you may have $500,000 equity - that'd be around £250,000 here which means yes you would be able to buy a home rightaway - especially if that £250K here was say a 50% deposit on a £500,000 UK house! - also depends where in the UK you'd be looking at, in central london, that £500K would buy you an apartment only!

Cars - again, on what criteria are you basing 'why are used cars so cheap here?' - depends which make, model etc etc...  supply/demand does come into it as well as well do a multitude of other factors....

If yer want to elaborate a little more, then certainly me and other posters can respond with more focussed responses to help you.


cheers! DtM! West London & Slough UK!

Just adding in my experience with the 3 'dongle' (love that word!!), actually because I didn't have 3 years credit experience (only 2) I wasn't able to get the dongle without paying a 'deposit' of like £75.  I opted to have my SO get the mobile broadband for the two of us instead.