Q I have never had a credit card. I have a debit card, a student loan, and I always pay my rent and other bills on time. I have never had any loan other than my student loan, and so thought I would be a good bet for mortgage lenders, but some people have told me that not having a credit card gives me a bad credit rating. Is this true? If so, should I get a credit card and only put small things on it? Does my student loan count? KW
A Your student loan would contribute to your credit record only if it was an old-style mortgage-type loan and you had defaulted on it, which doesn’t seem to apply in your case. Not having a credit card doesn’t give you a bad credit rating as such, but without data about how you manage credit, lenders may be reticent about lending to you.
It could be worth asking your bank – which is familiar with your financial habits – for a credit card so that you can build up some good credit history. But make sure you pay your monthly bill off in full every time. Contrary to popular myth, paying in full looks good to lenders as it shows you are well in control of your credit.
The other thing you can do to improve your chances of getting credit in the future is to make sure that you are registered to vote at your current address. You could also hope that some time in 2013, information about rent payments start to appear on credit records, as Experian announced that they would back in March 2012. This would be a big boost to your credit history, given your consistent punctuality in paying your rent.
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