How would I go about building my credibility with banks?

MyPeopleNeedMe

Long story short, I'm 34 and never had any loans or a credit card. The way I understand it, banks have some kind of 'credit score' when you apply for a bigger loan.

So say I wanted to take a mortgage with having just an average job and given that I have no need for loans, what should I do to build up my score?

Merowig

Easiest option is get a credit card (AIB has one with Cash Back), use it - and clear it every month immediately

WhoWhatWhere

Merowig wrote: »

easiest option is get a credit card (AIB has one with Cash Back), use it - and clear it every month immediately

+1

If you get your credit card and use that for you day to day transactions as you would your debit card usually, clearing it by the due date every month (early is fine too) then you'd be building your credit score that way.

GerardKeating

Merowig wrote: »

Easiest option is get a credit card (AIB has one with Cash Back), use it - and clear it every month immediately

Plus with this option, you actually save money, assuming you don;t have free banking with your current account, and you clear the balance every month.

WhoWhatWhere

OP if you wanted a credit card I'd suggest the 'Be' visa or mastercard from AIB. It's given out to anyone who asks (I got it at 19 with no job at the time) and it's low interest and a 500 limit to start with so it's easy to clear off when you're first starting, after 3 months you can apply for an increase too.

Merowig

WhoWhatWhere wrote: »

OP if you wanted a credit card I'd suggest the 'Be' visa or mastercard from AIB. It's given out to anyone who asks (I got it at 19 with no job at the time) and it's low interest and a 500 limit to start with so it's easy to clear off when you're first starting, after 3 months you can apply for an increase too.

Mine looks better
https://aib.ie/our-products/credit-cards/platinum-visa-card

Plus Cash Back as soon as you spent a certain amount on the card.

WhoWhatWhere

Merowig wrote: »

Mine looks better
https://aib.ie/our-products/credit-cards/platinum-visa-card

Plus Cash Back as soon as you spent a certain amount on the card.

True but because he never had one and dependent on how much he makes, if he doesn't get the platinum its a 6 month wait before he can apply again!

mahoganygas

OP I asked the same question to BOI mortgage advisors and they said creditworthiness is judged only on the ICB report.

Unlike the UK and the US, we do not have credit scores in Ireland.

There is no way of having a positive credit rating with banks. Only neutral (have had no debt, or always repaid debt on time) or negative (defaulted on debt or late payments).

Taking out small loans or getting a credit card just to appear creditworthy doesn't work here unfortunately.

Hope this helps.

Alkers

You'll get a mortgage just fine without having borrowed before, don't take out a loan for that reason.

Geuze

Indeed.

Where do people get the idea that you need to have a record of clean debt to get a mortgage?

What you want is a record of regular savings.

And no debt / overdraft / credit card balances.

Geuze

MyPeopleNeedMe wrote: »

Long story short, I'm 34 and never had any loans or a credit card. The way I understand it, banks have some kind of 'credit score' when you apply for a bigger loan.

No, they don't.

No such concept exists in Ireland.

It may in the USA, but not here.

Geuze

WhoWhatWhere wrote: »

+1

If you get your credit card and use that for you day to day transactions as you would your debit card usually, clearing it by the due date every month (early is fine too) then you'd be building your credit score that way.

Except there is no such concept as "credit score" in Ireland.

MyPeopleNeedMe

Well thanks everyone, case cleared

Trish56

MyPeopleNeedMe wrote: »

Long story short, I'm 34 and never had any loans or a credit card. The way I understand it, banks have some kind of 'credit score' when you apply for a bigger loan.

So say I wanted to take a mortgage with having just an average job and given that I have no need for loans, what should I do to build up my score?

Most important when applying for a mortgage is to prove affordability as in savings and or paying rent through your bank account for the last 6 months. You will need to show that you have a deposit of 10% on a purchase price of up to 220k