Credit For An 18 Year Old

[hammerman]

Daughter is 18, works full time and has done since 1st Aug 2016.

Would you recommend her get a small amount of credit in order to start her credit rating? If so, what would you suggest? Small (£500) credit card, small car loan or another?

She's looking at moving out in the next year and will rent somewhere so she will need a credit score....as she will with many things in life.

Any suggestions welcome

[Zacs-Master]

http://www.moneysavingexpert.com/loans/credit-rating-credit-score

[Hymie]

Make sure she is on the electoral register, with her salary paid directly into her bank account.
Have any regular payments made from the account by direct debit.

To build up a credit history for free; take out a credit card, spending on it each month and clearing the balance each month.

Credit card, with balance paid off every month = very good credit rating
Credit card, with at least the minimum paid each month (ideally more) = good credit rating
Credit card, with no minimum payment made = bad credit rating

I would not bother to take out a loan (paying interest) just to get a credit rating, when other options are available.

[Jackdaw33]

I agree that a credit card is the way to go. Also, it is a good idea to set up a DD to cover repayments so that you never actually miss one inadvertently. This can be for the minimum, a fixed amount or the full amount. This is what I have done and found it very useful as I have been in and out of hospital a few times and unable to see to financial affairs.

[ToraToraTora]

yes, but she should buy something small each month and pay it off each month. Then she will not get into debt and her credit rating will grow. However, this is very difficult for young people and the temptation to spend up to the limit on pointless endeavours is often overwhelming so good luck!

[johnk]

Avoid debt whereever possible. The credit card idea sounds good.