Bad credit? I'm really confused.

I went to the NatWest branch my uni campus (University of Nottingham) today to see if I was eligible for an overdraft.  I was told that because I had to prove financial ability to get a student visa that I wasn't allowed an overdraft (honestly, the money was on its way via a debit card being sent to me, but I just wanted £10).  As annoying as it is, I understand the angle that they're coming from.

I was also told, however, that even if I was a UK student, I still wouldn't be eligible, as I failed a credit check.  Failed?  The bank employee told me that this was because I had probably failed to pay bills and owed money.  Owed money?  Failed to pay bills?  I have a pay as you go contract with Orange, and I am never billed.  I have never owned a credit card, and I do not intend to.  I have never bought anything on credit (ever) and I have only used my debit card to withdraw money from my bank and to pay for one large thing (a gift for my boyfriend worth £130) when there was at least £400 in the bank at the time.  I was really shocked (and still am) to hear that I have failed a credit check because of supposed "bad credit".  I'm really confused and somewhat frustrated, as I don't want this to taint any records that I have.

How do I get to the bottom of this?  How does somebody who has never had a bill in the UK, owned a credit card, or paid for something with credit have "bad credit" and fail a credit check?

You probably failed it because you don't actually *have* any credit, which is just as 'bad' in a lender's eyes. If you intend to stay in the UK you will need to start building up credit here. I think there are some threads on that around here somewhere.

That said, I thought student's could get overdrafts from the bank they hold their current account with. But they may be cracking down on that now.

I'm pretty sure that if I go to a non-uni branch I'd get the overdraft, simply because the NatWest branch where I live didn't seem very knowledgable about student accounts.  In fact, when I went to the bank today I was asked why I wasn't given a student account.  I'm really fine with having a Current Plus account, as it works for me. 

Hmm, I shall look into this thread about building up credit.  I was never aware that no credit was considered "bad credit".

I didn't *fail* a credit check but when I first arrived I wasn't given an overdraft from the bank because of my lack of credit.  The bank employee may have told you that because that is the most common reason for people getting denied credit with them--having outstanding debt or bad credit.  I wouldn't fret because you haven't done anything to ruin your credit... you've just not done anything to build it yet either.

Ah, k.  The bank employee made it sound really dreadful.  "Well, it looks like you've failed a credit check, which means that you've not paid bills or owe money."  I think not.

I'll look into building up credit -- however, just from the way things were worded, I thought I was in trouble or that this would prevent me from doing things further down the road.

most (all?) banks won't give overdrafts to international students, because a) they don't have credit in the UK and so don't qualify for a regular current account and b) aren't permanent UK residents and so don't qualify for the student accounts with overdrafts that UK students get.

My fiance is a UK student and got a student account with an overdraft without a problem when he was 18 and just starting uni with no credit history (but I'm sure they wouldn't have given him one if he had had a *bad* history.)  But credit history is definitely important for getting overdrafts in general, at least in the non-student world.

Understood.  Thanks for all of the replies!  I looked in the previous threads a few pages back about building up credit.  My plan of action is to get a card with Sainsbury's or Tesco's -- or a store, in general -- and make small purchases that are easy to pay back.  I really didn't want to get a credit card, but it seems like there is no other way to build credit.  For instance, if I signed up for an 18-month contract with Orange and paid all bills on time, would that qualify as good credit?

Is the view that "no credit is bad credit" common in the UK?

Is the view that "no credit is bad credit" common in the UK?

I think it's pretty much viewed this way in the US as well. I didn't get my first US credit card until fairly recently. Never got one in college (when it is fairly easy to obtain one), and just used my debit card for all purchases. It was difficult to get one as someone in my late 20s, because I had no credit history, and thus 'bad' credit. I'm slowly building it now. In fact the only reason I have the card is for this purpose.

I think it's pretty much viewed this way in the US as well. I didn't get my first US credit card until fairly recently. Never got one in college (when it is fairly easy to obtain one), and just used my debit card for all purchases. It was difficult to get one as someone in my late 20s, because I had no credit history, and thus 'bad' credit. I'm slowly building it now. In fact the only reason I have the card is for this purpose.

It's ridiculous, isn't it?  I've been avoiding credit cards because of how easily they can cause bad credit, but it seems to be the only way to build up credit!

The banks seem to have changed their rules then. 7 years ago I was able to get an overdraft on a student account as an int'l student no problem.

Susan - you can try for store credit but that may give you just as much trouble. I think I've heard that some of the catalogues here offer credit and that's easy to get... someone will hopefully chime in and clarify that because it's not something I've personally done.

The banks seem to have changed their rules then. 7 years ago I was able to get an overdraft on a student account as an int'l student no problem.

Susan - you can try for store credit but that may give you just as much trouble. I think I've heard that some of the catalogues here offer credit and that's easy to get... someone will hopefully chime in and clarify that because it's not something I've personally done.

Can an international student get a credit card with their bank?  I'm confused about that as well.

Can an international student get a credit card with their bank?  I'm confused about that as well.

Sometimes, you can!  When I opened my account with Natwest I was asked whether I wanted to apply for a credit card- the limit would have been really low for an international student (something like £300, I think.)  I declined the offer at the time, but I definitely wish I had done it now in order to build my credit!

I'm not sure why I could have possibly gotten a credit card but not an overdraft- I did think that was strange.  But it was made very clear to me that I didn't qualify for an account with overdraft or cheque-writing privileges because I was an international student...

I have a Current Plus account, which I'm not sure I was supposed to get (yet, it was given to me at a non-uni branch, and I'm not complaining).  I have cheque-writing privileges.

I'm worried about getting a credit card now.  Who do I get one with?  I'd just prefer to get one for my bank, and it seems even students can get them with NatWest, but I'm not sure if an international student can.

I have a Current Plus account, which I'm not sure I was supposed to get (yet, it was given to me at a non-uni branch, and I'm not complaining).  I have cheque-writing privileges.

I'm worried about getting a credit card now.  Who do I get one with?  I'd just prefer to get one for my bank, and it seems even students can get them with NatWest, but I'm not sure if an international student can.

Lucky you!!  I've been with NatWest since 2004 and JUST NOW got a Current Account - still no overdraft, but we're getting closer!!

The bank employee went to lengths to tell me that I shouldn't have been given that account and that she didn't understand why I was given it.  I didn't want a student account, and I was given a choice at my non-uni branch in Derby.  I honestly bet that I would have had a less straightforward and more sympathetic answer about an overdraft if I went to a non-uni branch.  I'm in no rush, but it was just an enquiry.

I'm going to ask the non-uni bank about a credit card or something that can help me establish credit in the UK.