Credit building/credit cards

[HippyMoon]

Hello. DP and I are in our early/mid twenties and do not have parents who we can ask about these kinds of things, and articles online do not make sense, so I thought I'd ask here.

DP and I want to buy a house in the next few years. We both have OK, but not great credit - mine is worse as I was homeless from 16-18 and sadly ran into some financial trouble throughout this time. Credit cards are often suggested as a way to boost credit but how does it actually work? Do we have to pay a bit extra for everything for a while in order to boost credit? Or do we pay it off before there is an extra charge - but then does it count on a credit statement?

And are there other ways we can boost credit without using a credit card?

Thank you!

Making payments on any type of loan will help boost your credit. With a credit card just pay it in full every month before the due date. You shouldn't be charged anything extra. There are loads of online reviews comparing them:

www.fool.co.uk/personal-finance/credit-cards/best-credit-cards/

The personal finance board on Reddit is a great place for this type of question. It's somewhat US centric, so if you post there just put (UK) in the subject to reduce confusion.

www.reddit.com/r/personalfinance/

I've checked and there are some UK specific personal finance subreddits and wikis you can use:

www.reddit.com/r/personalfinance/wiki/country_index#wiki_united_kingdom

Hello, what exactly do you mean by financial troubles, do you have defaults, late payments, have you ever had a home loan? Having a credit card and paying it off in full every month will boost your credit score. Having utility bills in your name such as water, electric will also improve your credit. Make sure you are on the electoral roll as that also improves your credit.

Thank you @MissConductUS I'll try there.

@Bat96 I had council tax debt and I had an argos card that I didn't pay off in the amount of time you were meant to. I also just didn't really understand finances (I was 16, alone and quite ill) and quite often ended up overdrawn but I had no overdraft so it did not look good. I got a better grip of my finances around 19 and have paid everything off now thank goodness but it did really impact my credit score.

I'm on the electoral roll and bills etc are in my name and paid on time now.