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Can I get a loan just to build a credit rating?

  • 06-09-2019 12:47pm
    #1
    JackieChang
    Registered Users, Registered Users 2 Posts: 1,494 ✭✭✭


    I have an OK bit of savings, never needed a loan for anything. Haven't had a credit card in 10 years. Therefore I have zero credit rating.

    Can I just get a €1,000 loan to build up a credit rating? Will the bank laugh in my face or is this a normal thing to do? I'll literally just be lodging the loan money into my savings account, then paying it off monthly.


Comments

  • #2
    Prospector1989
    Registered Users, Registered Users 2 Posts: 212 ✭✭Prospector1989


    I'm no expert but during our mortgage process we were told that the above is a myth.
    Our broker said
    "The bank won't look negatively at someone who has never needed needed a loan over someone who has needed a loan and paid it back".

    I don't know what your situation is but during the mortgage application process the banks are interested in ability to repay, savings etc.


  • #3
    Trish56
    Registered Users, Registered Users 2 Posts: 1,256 ✭✭✭Trish56


    The lender will be more interested in your savings record so if you can show a build up of regular monthly savings and also if you pay rent that there is record of it going out of your current account.

    It's also important to show a paper trail of your savings going from your current account to your savings account rather than taking cash from ATM and lodging to a Credit Union etc.


  • #4
    El_Duderino 09
    Registered Users, Registered Users 2 Posts: 20,727 ✭✭✭✭El_Duderino 09


    I’m not an expert but we were told by the bank in the uk that we had a very good credit score. All we did was pay all our standing orders and direct debits. They all came out the day we got paid so a never missed them.

    We also had a house saver ISA that we saved a set amount into each month and never withdrew from that account. That counts.

    Then we got a credit card and it was interest free for 2 years. So we loaded it up with furniture we needed when moving to an unfurnished house and paid it off every month.

    Then we got another Interest free credit card in my name and did the same with it.

    So our credit rating didn’t cost us a penny in interest. Ask the bank what factors count towards a good credit rating before asking for a loan.


  • #5
    [Deleted User]
    Posts: 4,727 ✭✭✭ [Deleted User]


    It’s a myth. As long as you don’t have bad credit rating, you are all good.

    Bank generally won’t discuss your credit rating with you either, that’s for the ICB.


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