Guide for new immigrants in the UK on how to build credit score

When you first arrive in the UK, the banking and credit system can seem complicated and difficult to navigate.

To open certain bank accounts, get loans, and acquire finance agreements on products such as cars, you’ll need a high credit score. This is an indication of your financial trustworthiness.

In this article, we'll look more closely at what credit is and how you can build it. We’ll also introduce Pockit: an account that is easy to open, allows you to build credit and gives you access to great rewards.

Understanding the UK credit system

The UK credit system works by assigning each person a three-digit number based on their financial history.  

This credit score is a valuation of your overall financial health and is used to indicate that you are financially trustworthy.

Building up your credit history is important if you ever want to request a loan, apply for finance on a car, or take out a credit card. It's also important for housing as many landlords will run credit checks before accepting you as a tenant.

A higher credit score will also make you eligible for premium bank accounts with better overdraft and credit facilities, and can even get you lower premiums with insurance companies.

Your credit score changes over time based on activity such as repayments, missed payments, and taking extra credit out. To understand more about how credit scores are calculated read our guide to how credit scores work.

Immigrant credit scores in the UK

If you're new to the UK you most likely won't yet have a credit history. It takes around 3 months for this to build up and to get a high score, you’ll need to be making regular payments on a credit product.

But how do you get access to a credit product in the first place?

Thankfully for expats, there is such a thing as an account with no credit checks. As we explore in the next section, it is an easy way to start building a positive credit history.

Opening a bank account in the UK: A guide for non-residents

While you’ll struggle to open some bank accounts without a credit score, there are some you can open right away. One of these (Pockit) also allows you to build your credit so you can access other types of finance products.

Basic bank accounts

One of the most common non-UK resident bank accounts are basic current accounts. These accounts are designed for everyday banking and allow you to perform basic functions like paying money, withdrawing funds and making payments.

These accounts don't involve credit like overdrafts or loans and therefore don’t require you to have a credit score. Basic bank accounts also don't help to build up your credit score and most don’t come with additional perks like interest or cashback.

To discover what documents you need to open a bank account in the UK, check out our guide to how to open a bank account in the UK.

Prepaid accounts

A prepaid account is similar to a basic bank account but funded in advance. This means you can pay cash in, receive your salary here or transfer money as needed.

Because you're not borrowing money these accounts are also easier to set up as they don't require credit checks to open. This makes them ideal for new immigrants to the UK.

Prepaid accounts also often come with better perks and benefits compared to basic accounts with old-fashioned high-street banks. For example, Pockit's prepaid card can be approved online in as little as 3 minutes.

You'll also have access to amazing benefits like:

Cashback Rewards

• Get up to 15% cashback and discounts with selected high-street brands.
• Get 2.5% back on all other spending & Direct Debits on the first £100 spent.
• Save up to £264 on mobile, TV & broadband bills.

Purchase Protection

• Protect your eligible purchases of up to £1,000 in case of damage, theft or returns.
• Refund up to £1,500 of unused tickets if eligible.
• Extend warranty by 12 months for brown goods.

Credit builders

We'll take a closer look at credit builders in the next section, but in short, credit builder accounts are specialised accounts designed to help you improve your credit score.

By paying a small manageable amount each month that is reported to credit reference agencies, you can improve your score and show lenders and creditors that you're financially trustworthy.

Building your credit score as an immigrant in the UK

Read on to discover how you can build your credit with no previous history.

1. Checking your credit score

There are multiple online tools you can use to check your current credit score. Experian, ClearScore and MoneySupermarket all offer free checks making them ideal if you're trying to save money while building credit.

Sites like these pull data from the three main Credit Reference Agencies (TransUnion, Equifax, and Experian). These CRAs collect and store information about your credit history, and then generate a score based on a combined number of factors.

Scores will vary slightly as each company uses a different scoring system and can receive information at different times. However good scores with one usually mean good scores with another.

2. Look into credit builders

Credit builders are special accounts designed to build your credit score. You’ll make manageable payments regularly that are then reported to all the main credit reference agencies.

For example, with Pockit's Credit Builder, you just need to pay £9.99 per month regularly to start building credit. You'll also be entitled to fantastic benefits like £500 at 0% interest* after paying in for just three months.

Credit builders are perfect if you're a new immigrant to the UK as you don't need a credit history to open one. You can also set it up alongside your regular prepaid account so they work in the background for you to build your score.

3. Apply for credit less often

While checking your score is a 'soft check' and doesn't affect anything, applying for credit means lenders do what's known as a 'hard check' that can temporarily lower your score, especially if you are refused credit.

Applying for credit too often in a short space of time can have negative consequences and should be avoided if you're trying to build your credit score in the UK.

Building credit in the UK

So there you have it, a complete guide to how to build your credit score for new immigrants in the UK.

For queries or support with our credit builder and prepaid card, get in touch and one of our team will be happy to help you.

FAQs

Do immigrants have a credit score in the UK?

Most immigrants to the UK do not have a credit score. However, credit reference agencies can generate a score with as little as 3 months of credit history so depending on how new you are to the UK you might have started to build one.  

Why can't I get a UK credit card?

If you are a new arrival in the UK you won't yet have a credit history. This means lenders won't be able to trust you with credit services like loans or credit cards. Luckily, credit builders such as Pockit allow you to top up your credit score to allow you to be eligible for these.

How long does it take for immigrants to build up a good credit score in the UK?

Even when you're making payments on time and trying to be financially responsible it can still take a while to build up your credit score. Around 9-12 months is the average. This is why credit builders like Pockit's are so important because you can get a good score in as little as 3 months.

Do debts transfer from abroad to the UK?

Debts from abroad generally don't automatically transfer to the UK. However, depending on the nature of the debts, they could be reported to UK credit reference agencies. If you move and have significant outstanding debts, creditors might also pursue collection by legal means.

Is credit history from another country transferable to the UK?

Credit history from other countries is not generally automatically transferred when you immigrate. Some lenders might consider overseas credit history as part of their assessment processes though so it's worth checking with them if you've just moved to the UK.