

Will paying rent via Standing Order help DS's credit rating?

(15 Posts)
ArgyMargy Mon 07-Oct-13 11:09:31

DS has just moved into student shared house. I am paying his rent but if he sets up the SO through his own bank account will this help him establish a (good) credit rating? He's not taking out any student loans or grants.

CogitoErgoSometimes Mon 07-Oct-13 11:38:50

I think the more of a financial track-record he can start to create, the better. He could also consider using a credit card with a relatively low limit and setting up a direct debit to pay off the balance in full each month.

ArgyMargy Mon 07-Oct-13 12:32:26

Good idea Cogito - thanks! I think I'll have a look at moneysavingexpert and see if they recommend any credit cards for young people.

LadyKooKoo Mon 07-Oct-13 12:58:12

Most banks will offer a student credit card alongside a student bank account so it may be a good start to approach the bank he uses anyway and as cogito says, use the card and repay in full each month. If he is sensible with money then having an overdraft on his account which he then never uses would also help. A mobile phone contract would also help build a credit profile.

TheAlphaandtheOmega Mon 07-Oct-13 14:55:35

My DS has got a credit card to help build a credit rating. it is the same bank as his student account is with. His credit limit is £750 I think, he spends a small amount on it and pays it off each month.

ArgyMargy Mon 07-Oct-13 18:15:50

Thanks everyone - much appreciated.

Piers Wed 09-Oct-13 00:55:04

Also worth making sure he applies to be on the electoral register and is registered for council tax at the new address (I don't think students pay CT but they still need to actually tell the local authority that's who / what they are to then be exempt). These are the kinds if things credit checking agencies use to confirm that someone did indeed live at the address they have provided for a credit check.

cookielove Wed 09-Oct-13 07:12:29

A contract mobile phone also provides a good credit rating. Well if he pays it off!

debtcamel Wed 09-Oct-13 08:21:30

To answer your original question, rent payments at the moment are not recorded by the credit reference agencies so don't affect credit ratings.

There there are some plans for them to be included, but if the house is owned by a small landlord I would guess it is pretty unlikely to happen for your son.

ArgyMargy Wed 09-Oct-13 08:40:52

Thanks camel - that's useful. Piers, I didn't think about him registering on electoral role. He's registered here and I've just requested a postal vote. Something to investigate for next time.

exaltedwombat Wed 09-Oct-13 10:03:10

Didn't we get into this mess by having unrealistic credit ratings? Why are you so keen to inflate his?
Am I the only person here who has never taken out an unsecured loan, and who only uses a credit card as a shopping convenience?

CogitoErgoSometimes Wed 09-Oct-13 10:27:17

It wouldn't be unrealistic or inflated, just a healthy credit score reflecting that the OP's DS is capable of managing money sensibly. Bully for you not taking out an unsecured loan but I don't see what that's got to do with anything... hmm

LadyKooKoo Wed 09-Oct-13 14:57:25

I am with Cogito on this Wombat as I fail to see what your point is. Having a credit score isn't about being able to get unsecured loans or credit cards. The OPs son will (presumably) one day want to get a mortgage and he will need a credit history for this.

ArgyMargy Wed 09-Oct-13 15:03:59

Exactly LadyKooKoo! DS may one day be lucky enough to apply for a mortgage or do any of the things where companies rush off and check your creditworthiness before telling you to get lost or charging you a higher fee. It's not just about unsecured loans.

ArgyMargy Wed 09-Oct-13 15:05:10

Btw Wombat, I've never had a loan either grin

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