How to Build Credit in the UK as an Immigrant

Building credit when you’re new to the UK can be hard, but it is possible, and you don’t even need a credit card to get started. Read more to learn how.
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With 37% of London and 35% of the UK’s residents being foreign-born, it’s no secret that the UK is an attractive destination to immigrate to and settle in. However, the process is often more complicated than expected, even after meeting the Government visa qualifications.

Despite the troubles that come with moving to a new country, the United Kingdom is a wonderful place to call home. Our biggest piece of advice for newcomers is to establish your financials and credit as quickly as possible. However, like many aspects of relocating, building credit in the UK as an immigrant is easier said than done.

Here, we’ll walk you through some strategic steps for building credit when you arrive in the UK. But first, let’s take a look at why it’s important to build credit in the UK.

Why Building Credit Matters as a Newcomer to the UK

A lack of credit history in the UK can lead to a string of frustrations. It can impact your ability to access credit cards, financing for personal loans, or even things as basic as housing. Having a credit history in the UK gives lenders a concrete way to assess your creditworthiness.

How to Get Started Building Credit When You’re New to the UK

So developing a strong credit score is critical for building your life’s foundation in the UK. But how do you do that? Let’s take a look at some of the best methods.

1. Find a Permanent Place to Stay and a UK Address

Avoid moving frequently after your arrival, as having a stable resident address to show your proof of identity is one of the most vital elements for building credit.

Additionally, resist the urge to simplify things by renting a fully-inclusive flat, where your rent covers all utilities, TV licences, and council taxes. Setting these accounts up yourself can all help build your credit, so avoid fully-inclusive flats for your long-term accommodation.

2. Open a Bank Account

Opening a bank account can actually be tricky at first depending on your ability to prove where you live—which is why it’s so important to focus on finding a permanent address first. If you work for a UK Gov recognized company, try asking your HR department for an official letter stating information such as your:

  • Full Legal Name
  • Current UK address
  • Previous address (even if it was abroad)
  • How long you’ve been working for the company
  • Current salary

If that option fails, consider opening a ‘new to UK’ bank account at big banks such as Lloyds. Be aware that these accounts often have higher fees and less favourable benefits, but still may be worth it depending on your specific circumstances.

3. Sign Up With Utility Providers

Regular payments to some utility options can help build your credit score when you’re new to the UK. This is why we advise against fully-inclusive rentals, as you miss this credit-building opportunity. Consider trying to set up the following:

  • Council tax payments (once you are renting a flat)
  • Water and sewage service
  • A landline—while it may be outdated, it indicates you have a permanent address and can boost your credit score
  • Gas and electric payments

Keep in mind that while all of these will help establish your credit, they’ll only benefit you if you make timely payments. Relocating to a new country presents a lot of moving parts, but make sure you prioritise your payments by using direct debits wherever possible after setting up your bank account.

4. Register for the Electoral Roll

Registering with the Electoral Roll can give your credit a lift by proving where you live. It’s important to note that there are a number of qualifying Commonwealth citizen countries that allow newcomers to vote in UK elections, although this might not be an option for many immigrants.

FAQs About Building Credit in the UK as an Immigrant

Building credit in the UK is complex, and immigrating to the UK is complex. Having questions is natural, and here we’ll answer some of the most common questions about building credit in the UK.

What Credit Score do you Start With in the UK?

When you’re new to the UK, you actually don’t have a ‘starting’ credit score, because you’ll have no credit history in the UK, and UK credit reference agencies only pull information from UK accounts.

So, the good news is that you don’t start with a bad score, but the bad news is that if you already have a good score elsewhere, it won’t transfer to the UK. Focus on making timely payments as you open accounts for utilities and the like, and you’ll see your credit score develop and rise over time. 

Does a Phone Contract Improve Your Credit Score?

Yes, mobile contracts can improve your credit score! Mobile contracts typically have a contract length of 12-24 months and can help build your credit score after 3 months. Like other accounts, be sure to maintain regular payments to build your credit score with a mobile contract.

Can You Have a Credit Score Without a Credit Card?

Yes, you can have a credit score without having a credit card. That’s not to say that credit cards aren’t one of the best tools for establishing your credit score, because they are, but if you’ve recently immigrated to the UK, it can be difficult to find a credit card with a favourable APR.

Many of the things we’ve mentioned in this post, such as registering for the electoral roll, opening a bank account, or signing up for utilities and paying local taxes all contribute to your credit score and help establish a credit history. In turn, these things can help you become eligible for other credit building tools like credit cards or personal loans.

Build Your Credit Score with the Pave App

If you follow these steps and never miss a payment, you should slowly build good credit in the UK. Granted, not all of these will be easy, and your circumstances may not allow you to take advantage of them all. However, the good news is that there are more modern options to help build credit than ever before—like the Pave app

The Pave app works to build your credit score through smart features like bills monitoring, personalised credit fixes, and actively sharing payments with credit bureaus to build your score. To see for yourself how Pave could help build your credit score when you’re new to the UK, download the app from the App Store or Google Play today.