UK credit

Hey everyone!! It's been AGES since I've been on this site. Will have to catch up and see what's been going on.    My question is, how long did it take for you Americans to establish credit history to be able to purchase a house? I have been here for almost a year now. Is that long enough?

Hi Elux,

Take a look over at the money section of this board as there's quite a few threads about building up credit. Also, some postings about buying a house here etc. There's quite a few 'recent' changes to buying a house now, alot less choice in terms of mortgages. The 'general' consensus being a 40% deposit on a property gets you the pick of the current crop of best rate/deal mortgages.

Credit rating plays an important part, I'd also 'suggest' that a years worth of credit history isn't going to be enough in the current climate. If you also have say a 5 or 10% deposit, you're only likely going to be considered for what's now higher (proportionally) rate mortgages.

I'll also 'assume' for a second you're not a UK citizen, and therefore in the eyes of the financial and legal system etc - a 'foriegner'. During the 'Good' times of the last few years before the current economic doldrums, the mortgage industry 'generally' would lend to people in this catagory who had a minimum 25-30% deposit. I can only speculate that now, for a foriegner to purchase a property here they'd need possibly substantially more than the 40% figure bandied around as that seems to apply to UK citizens.

Hopefully you've got that kind of financial liquidity - if so speak to the banks and lenders to see what they offer ! if you can get a tracker, with interest rates being an utterly low 0.5% you'd do good getting one. Of course as the economy recovers, you will see payments rise. If you do go for a fixed rate etc, be wary of when the low fixed rate period end and potentially re-negotiating a new deal.

there are quite a few things you can do to help you with you're credit rating, have a look on the threads and post up more of your situation for some help!

Cheers! DtM! West London & Slough UK!

Hey Dennis thanks for the thorough explanation. I didn't even see this section!! I still get lost navigating this website!   

I wouldn't be going in alone. It would be a joint mortgage (if I even have credit history established) with my husband who is a British citizen and we expected the down payment to be high so yes we are ok in that dept.  I think you are correct on saying 1 year is not enough though for me.

I think it's gotten a lot harder, since the economic meltdown. I've been here six months, have had a (well paying) job the entire time, have direct deposited the full amount into my bank account, haven't let the balance go below five digits once, have an overdraft card (that has never gone over), and the bank is still refusing to give me even their gimpiest credit card. Unlike in the US, store cards are also amazingly difficult to get - most will auto-decline you if you've been here less than a year. I was able to get a mobile phone (with a large deposit) and arrange bills and whatnot without too much trouble, but everyone is basically saying that I'll probably need to have been here for 10-12 months before I can even get my first credit card.

I've heard people have had success transferring over their US AMEX cards, thus jumpstarting the process a bit, but I hadn't heard of that until I came here and by then it was too late.

And here I thought I'd be able to buy a house after about a year, given that I have more than enough for a deposit....  =/

ON this note, has anyone been able to get overdraft protection? We have no plans of getting a car or a mortgage, but would like an overdraft protection scheme. Last month we transferred money one day and the next day spent money, needless to say the money we spent cleared before the transferred money. So now we are being charged 20 pounds for being negative 3 pounds   

ON this note, has anyone been able to get overdraft protection? We have no plans of getting a car or a mortgage, but would like an overdraft protection scheme. Last month we transferred money one day and the next day spent money, needless to say the money we spent cleared before the transferred money. So now we are being charged 20 pounds for being negative 3 pounds   

If you challenge that with the bank, they will refund you the 20 quid, they are not supposed to charge you unless it exceeds 10.

It would be a easy fight on your behalf..in fact I think a mention of it to the bank should have it refunded immeadiatly

ON this note, has anyone been able to get overdraft protection? We have no plans of getting a car or a mortgage, but would like an overdraft protection scheme. Last month we transferred money one day and the next day spent money, needless to say the money we spent cleared before the transferred money. So now we are being charged 20 pounds for being negative 3 pounds   

I would guess it would depend on the amount of overdraft, which I assume would be piddly compared to the amount you would need for a mortgage.

I was just at the bank yesterday getting our mortgage sorted.

Firstly I'll say you MUST have at least 10% deposit --which currently gives you an interest rate on the mortgage of about 6.75%.  If you have 15% deposit that goes down to 5.5% roughly speaking.. so its worth getting a deposit together.  We were told by a mortgage advisor that she didn't know any banks that were doing 100% mortgages anymore and barely any were doing interest only mortgages.

I dont have any credit over here really, besides being on my husbands credit card.. and we got approved. We actually got approved for £60,000 more than we wanted to borrow... but we'd never borrow that much.

My best advise is to go to an independent mortgage advisor first.  They input your details and have a scan of the market for you for the best mortgage for you (if your eligible). This saves you going to every bank in under the sun asking them what they'll offer you. Estate agents usually have a mortgage advisor in their office a few days a week that you can make an appointment with for free. Once they give you the details of the best mortgage for you, I would go to that bank/building society and meet with them telling them you want the deal the mortgage advisor told you about--that way you cut out the mortgage advisor because they charge fees for everything besides the initial meeting... and theyre really unneccesary, but do give you excellent advise at that first meeting when your a bit clueless about the whole process like we were.

Also note, our mortgage advisor told me I needed to have ILR to get approved, which I do.

Best of luck 

ON this note, has anyone been able to get overdraft protection? We have no plans of getting a car or a mortgage, but would like an overdraft protection scheme. Last month we transferred money one day and the next day spent money, needless to say the money we spent cleared before the transferred money. So now we are being charged 20 pounds for being negative 3 pounds  

I just opened a new current account at the Co Operative bank- it came with a small overdraft of £200.  I have very very little credit here. Factors that worked in my favour:

-Joint application with my husband who has lived in the UK for all of his life (but, he has almost no credit due mostly to being young. But they liked that he had 3+ years of stable address history.)
- I've been living here for 2.5 years.
- We're both on the electoral roll (I have commonwealth citizenship)
- We both have permanent jobs.

Before this I had just a basic bank account with a Solo card...so happy to finally have access to a Visa debit card! And cheques!

I was just at the bank yesterday getting our mortgage sorted.

Oh, also, thanks so much Chrissy for the information on mortgages. Kinda confirms what I suspected, although good to hear from someone who's recently gone through the process.

Oh, also, thanks so much Chrissy for the information on mortgages. Kinda confirms what I suspected, although good to hear from someone who's recently gone through the process.

Not a problem.  PM me if you have anymore questions 

ON this note, has anyone been able to get overdraft protection? We have no plans of getting a car or a mortgage, but would like an overdraft protection scheme. Last month we transferred money one day and the next day spent money, needless to say the money we spent cleared before the transferred money. So now we are being charged 20 pounds for being negative 3 pounds   

I opened a Silver account with Lloyd's when I first got here and it came with overdraft protection. From what I've seen of the various accounts available to newbies, it's a fairly decent package.

If you challenge that with the bank, they will refund you the 20 quid, they are not supposed to charge you unless it exceeds 10.

It would be a easy fight on your behalf..in fact I think a mention of it to the bank should have it refunded immeadiatly

Where are you getting this info from? I couldn't find anything online that says a bank cannot charge you for less than 10. And technically I found out that its a 3 pound charge for the actual overdraft and a 20 pound administration fee (can only be charged once a month)

I opened a Silver account with Lloyd's when I first got here and it came with overdraft protection. From what I've seen of the various accounts available to newbies, it's a fairly decent package.

We have the silver account with Lloyds and it does not come with overdraft protection automatically.

Where are you getting this info from? I couldn't find anything online that says a bank cannot charge you for less than 10. And technically I found out that its a 3 pound charge for the actual overdraft and a 20 pound administration fee (can only be charged once a month)

Bank charges are considered unlawful in Britian.  There was a huge explosion of people recliaming charges steming back for the last 6 years.  It all based on "fairness".  The fact you had money being transfered at the same time would mean it would be considered "unfair"

Here is a quote from Money Saving Expert website

The law behind this

The core argument is that banks should only impose charges which are in proportion to their costs. This is because under the Unfair Terms in Consumer Contract Regulations the charge should not exceed the cost to the provider.

Yet go beyond your overdraft limit or have a cheque or direct debit payment bounce and the banks charge up to £39 a time – even if you’re only £1 over the limit. Yet all it has to do is send a computer-generated automatic letter with a franked stamp. A report by a professor of banking estimated this costed only between £2.50 and £4.50. And this was being generous.

All in all, this means, I any many others believe, bank charges are unlawful, so as the banks had no right to grab your cash, but still did it, you’re entitled to get it back.

The banks’ primary argument has been that ‘unfair contract’ terms don’t apply to bank charges, but the Office of Fair Trading (OFT) disagreed so started the test case to find out. Yet that has twice been blown out of the water, with both the High Court and Court of Appeal having decided that bank charges are governmed by these rules. A great step forward for reclaimers.

The next stage is for the OFT to assess whether it thinks bank charges are actually unfair, and we are expecting to hear more on this on in the next few months. See the Bank Charges News article for updates.



There is more about it here from Money Saving Expert :-
http://www.moneysavingexpert.com/reclaim/bank-charges

Update to the original post 6 months ago. We exchanged contracts on our house today!! and I got approved for an American Express (UK) with 5K limit. I've been living here for 15 months now. Good luck to those of you also trying to get and establish credit here.