Credit Rating

[Ann]

Not sure where to post this but would like to know if my friend is correct.

I don't have a credit card (don't believe in them) only a Debit card linked to a current account which never goes below £100. Our mortgage was paid off years ago. I don't have store cards and I have no debts at all - having been taught in life that if I can't afford something I save up for it.

When telling a friend, she said if I don't even have a credit card it would give me a bad credit rating - black mark against my name if ever in the future I needed to be checked. Surely not? Was she joking please?

[Ann]

I had a mortgage 40 years ago and paid it off by 1988. Does that count for a credit rating?

[hc4361]

It certainly does, Ann. A mortgage is a form of credit, a debt, after all.

[hc4361]

Ah, just noticed the 1988 - transactions are valid for 6 years for rating purposes so fell off the radar long ago. :(

[hc4361]

I would advise anyone without a credit history to get a credit card that offers some sort of reward when they use it. If you regularly shop at Tesco's get their credit card (as an example).
Use it every time you shop in that store and as soon as you get home pay it off with your debit card.
That way you are building a credit history, not getting in debt and will get lovely vouchers every 3 months to spend instore.

[Maydup]

If we have our mortgage paid and a few savings to buy a car or a holiday, do we need to worry about our credit rating?