With so many options out there to purchase your ‘new’ used car, how do you know if the payment option is right for you? Or could an alternative route be a better option for your financial lifestyle?

If this sounds like you please ask me a question asklaura@motors.co.uk or if you want to find out more about our Q&A series please head here.

Car Finance – November answers:

Q: What happens if a lease car is written off?

A: There are a few things to consider if you are in this unfortunate position. Regardless of it being a lease car, any write off will be highly likely to increase your insurance premiums in the future and could result in losing your no claims bonus. When a lease car is written off it can take some extra time as your insurance company and lease company need to communicate and work out the value of the vehicle.

In this time, you will be expected to continue making the lease payments and of course you may need to find a temporary vehicle to use during this period. When you are leasing a vehicle, you can think of it as a long-term hire. The only difference is that you are fully liable for that vehicle, and it is your responsibility to ensure you have adequate car insurance in place. If the car insurance company offers to pay out less than what you owe on the credit agreement, then you will be liable to find the difference.

Therefore, a lot of people take out GAP insurance when leasing a vehicle. GAP insurance is designed to cover this kind of shortfall. So, in short, the process is the same as normal, you contact the insurance company, and they will then communicate with the lease company. The risk being that you may have a shortfall to cover if there is a difference between the amount the insurance company is going to pay out and the finance amount owed. Personally, I would always encourage GAP insurance when leasing vehicles to protect this possible situation.

 

Q: Hi Laura, I can’t afford payments for my car any longer, so I want to give the car back. I have only had it a year, what can I do?

A: Sorry to hear that you are in a position whereby you have to give up your vehicle. If this is going to be a temporary situation whereby you envisage you may need a car again in the next 6 months or so, I would contact the finance company to see if you can gain a reduction in the monthly payment or maybe a payment holiday.

I would suggest having a conversation with the car finance company anyway as they have a duty of care as part of your finance agreement and it’s far better to have the communication channels open. If you are set on giving the car back, then you have several options. Firstly, you need to find out how much finance is outstanding on your vehicle and see how that compares to the current value (a dealership should be able to give you a guide price). If you give the vehicle back to the finance company, they normally use an auction to sell the car on and in this case, you could end up with a shortfall between the finance and the sale price that you would have to cover.

The alternative option is to explore selling it directly to a dealership or car broker, the only thing to remember is with outstanding finance attached to the vehicle it makes it far less desirable. To increase your chances of selling directly, you could explore using savings or a personal loan to repay the finance and then repay that once the car is sold. You never know, you might even make a small profit!

Q: Hello Laura. I recently relocated to the UK to work as a social worker. My job requires a car but I don’t have the money to make a cash purchase at the moment. So am I eligible for a car finance purchase?

A: Welcome to the UK! Your eligibility will depend on a few factors starting with the type of visa that you hold. If you hold a temporary work visa then any lending will only look at lending you money for the term of your visa, if at all. They can be super strict with temporary visas. If you have a ‘right to remain’ then you shouldn’t be constrained with the length of time you can take finance and stand a higher chance.

The other element to consider is that in the UK we use a credit score basis for all lending and as you are new to the UK you will not have a score yet. As well as the score they will look at your housing situation; if you have a council tax bill, if you have a home phone and if your name is on the bills so that’s a good place to start getting in order. There will be car finance companies you can use who will specifically support people with no/low credit scores, but the interest rate will be particularly high. If there is an alternative transport method that you could use for six months whilst you build your credit score then I think that would be worthwhile waiting for. The options will vastly open if you have built a credit score and got yourself more established in the UK meaning that your payments will be much more reasonable. Best of luck with finding the best solution that suits you.

Car Finance – October answers:

Q: Hi, I have a car on PCP which ends next year in August 2022 but I’m not sure what I should do as there is a big balloon payment which is over £3,300, which I haven’t got. Would it be best to walk away from the contract? 

A: There are a few things to consider when making this decision and of course please bear in mind that I must generalise as everyone’s personal situation is different, only you can truly make this decision.

Firstly, is this car still suitable for your needs? Would you envisage being able to keep it for another 2/3 years? If this is the case, then you could look at funding the balloon payment with a personal loan over 2 or 3 years. The monthly payments may well end up staying pretty similar. The benefit of this is that a personal loan is not secured on the car, so the minute you make that balloon payment you own the car outright and will have the flexibility to change sooner if need be. If this car is not suitable for your needs moving forward, then of course you can walk away from the contract. Assuming you still need a vehicle, this will mean that you’ll be going into a new contract. If this is the case then you will still need to fund a deposit and still have the same problem in 2/3 years’ time.

This is a situation a lot of people find themselves in as it’s so easy to just focus on the monthly PCP cost but you also need to plan to save for that balloon payment at the end, so you have the flexibility to either pay off or put towards a new contract. Saving an extra £85pm for 36 months will give you £3000 to enable that choice at the end of the term and needs to be considered when you are costing up PCP as an option.

Q: I’m looking at buying a car on finance and I have heard a few people mention that I should get a bank loan instead of car finance. Do bank loans have better interest rates? I am wanting to borrow £6,000.

A: This is a great consideration to make, and definitely an option. To ensure you are doing a like for like comparison make sure that you are looking at the APR percentage for both a personal loan and car finance. Often car finance companies will use a Flat Rat percentage to make it seem more appealing but an APR% is the indication of the true cost over the whole term.

It’s not only the actual percentage rate to consider. By buying a vehicle with a personal loan you are providing yourself with much more freedom in the future as this is totally unsecured and therefore not tying you to that particular vehicle. Before making any decisions, you should be able to get an indication from your bank as to whether they would lend you this much money or not, they should also be able to tell you what APR% they would charge. This is likely to be specific to you as it is often determined by your personal credit rating. This way you would know with more clarity if you can borrow money in advance of making a formal application.

Please also don’t forget to explore other lenders, not just banks. There are plenty of companies offering personal loans these days, you should be able to use a comparison site to see who has the best deal.

Q: Hi Laura, can you have two names listed on finance? A sort of joint finance? 

A: Yes, you absolutely can but there are a few things to consider before entering into a joint agreement. Firstly, you need to remember that this means you are both legally responsible for the monthly payments so if one of you doesn’t make a payment then the other party is just as liable for the whole payment. Joint finance is always set up as ‘jointly and severely’ liable, not 50/50. Secondly, this would tie you to that other person financially from a credit report point of view so therefore anything that’s negatively affecting them in the past or in the future could also affect you and your credit score.

Some finance companies have specific terms and conditions when it comes to joint finance, so you’ll need to check your eligibility. The last consideration to make is that only one of you can be a named owner of the vehicle, meaning that one of you will be paying finance for a vehicle that you don’t own. It’s important that both parties fully understand this element when entering into a joint finance agreement.

When it comes to purchasing a vehicle, I would avoid using joint finance wherever possible for all these reasons.

Car Finance – September answers:

Q: Hi Laura, since my office space has started to reopen after lockdown I am exploring new ways to travel to work to reduce my carbon footprint. A car is still something I would like to keep, just in case, but it is not getting the use it once was. With this in mind, is there a sort of ‘Pay as you Go’ insurance option I could explore, to save money?

A: This is such a great point to bring up as more and more people are working from home after the pandemic. There are a few insurance companies that offer a ‘Pay as you Go’ scheme whereby you pay a retainer for whilst the car is parked up on your drive, they then send you a device that tracks what miles you do, and you pay extra per month based on the mileage.

Regardless of the financial benefit I think this is a really good idea for habit tracking, it will make you think twice about making the trip in the car. Maybe you will choose to walk to your destination as it’s not worth the cost of using the car in that instance. A lot of the companies offering this also provide a cap per day so if you’re going on a longer journey, they will often max out at 150 miles per day.

As always, it’s worth doing a comparison as when I did this on bymiles.co.uk it only came out about £50 per year cheaper.

A few tips to keep your costs down on car insurance; reduce your mileage on the plan (you can always increase if you end up driving more) and consider putting on additional drivers, who have driven longer than you, which can really help get a fair price.

Q: Could you explain what Gap Insurance is, and would you recommend it?

A: Gap insurance is really designed to make up the difference between what the insurance company is willing to pay out on theft or write off and the original value of the car. It is also completely optional so please bear this in mind when being offered the product.

It might be appealing if you have brought a brand-new car and want to ensure that in the event of theft or write off you get a like-for-like new car or cover any finance owing on a vehicle. For example, if you buy a car for £29,000 and then in 18 months time it’s stolen, the car insurance company might offer you £19,000 as the current value of the car but the gap insurance would pay out the additional £10,000 to get you back in a new car again. The question to ask yourself, if this were to happen would I be happy to buy an 18 month old car for £19,000 or would I want a brand new one? Obviously if you take the vehicle on finance then the GAP insurance may seem more appealing as you could be left with owing more than the insurance company pays out.

It really is personal preference and any premium needs to be accounted for within your figures, and, as with all insurance, don’t forget to shop around for the best price.

Q: Am I able to increase my mileage on my lease car as I’m afraid of going over the agreed mileage and don’t want to be left with a hefty bill after?

A: This is one massive downside to leasing a vehicle, in most circumstances you can not increase your mileage allowance. Therefore, it is really important that you keep track of the miles you are doing and review them quarterly. When you have an indication that you may go over the mileage, you need to start accounting for that within your planned expenses.

As an example, if you’ve indicated you will do 12,000 miles per year and after month four you have already done 6,000 then you need to predict you may go over by 6,000 miles in that first year, at 0.15p per mile, that’s going to cost you an extra £900. Please don’t forget that you set the mileage over the full term, so you have time to claw it back in year two or three.

The only other thing to consider is if you intend to buy the car at the end of the term then you don’t normally need to pay for the extra mileage charge.

It really is a balancing act as if you are under your mileage at the end then you get nothing back and over mileage you get charged so trying to be honest with yourself, looking at previous years and reviewing regularly is the only way to take control of the situation.

Car Finance – August answers:

Q: Hi. I wondered if I can part-ex my car against another on finance. I have a 2012 plate Nissan Qashqai and I’d like something different. The only thing is that I don’t work now, but I have never missed a finance payment for more than two years, three years in January.

A: Thank you so much for asking this question as I’m sure you’re not alone in wondering if your employment status is taken into consideration. It sounds like your credit file is in great shape and that you have shown you can make the repayments. I also want to be clear that you can part-exchange a car even if it’s on finance, but it will be like starting afresh. Whoever you are part-exchanging with will offer you a price for the old car that is inclusive of repaying the finance attached to that car. The difficulty you might have is that they will review your affordability when looking at starting a new agreement with a finance company. It’s not so much if you are working or not, it’s what you are earning and what your expenditure is like. If you have little or no income then it is highly unlikely you will get car finance, regardless of your credit report and your previous payments. If you can prove affordability even if this is a pension or something of that nature then you should be good to go ahead. I would always take advice from the dealership and in some places, they will do a ‘soft search’ on your credit report. A big negative would be to get declined so these soft searches can be a great way of getting an indication of being suitable for car finance or not. Best of luck with investigating this around your personal circumstances.

Q: Hi, is there a certain credit score number you need for car finance?

A: As with all finance agreements, not just car finance, the lending company will always look at your credit report. They will not only look at the score but what has led you to that score. For example, they will review what agreements you already hold, what the balances look like, if you have made the payments on time and any black marks against your account. I always recommend that your credit score is something to be reviewed and nurtured over time, there are many things you can do in order to continue to grow it. Most lenders will be looking at scores about 650/1000 before lending, there are also some lenders who choose the interest rate they offer you depending on your credit score. I can recommend using an app like CreditKarma which will not only help you track your score but indicate ways you can increase your score. Your credit score is probably one of your most important commodities and you need to make sure it’s in the best place possible for when you need it. Review it regularly, understand it, nurture it and make it something to be proud of.

Q: What do companies see when they run a credit check?

A: Your credit report holds every piece of information on you; therefore I say it’s one of the most important commodities but is often not looked after well enough. Lending firms often ask credit reference agencies a question about whether you are a good lending risk or not based on what you are requesting. The credit reference agencies only provide an answer to that question and maybe a suggestion on the interest rate. They will not share your personal information. That said, if you want to know what is held on your report then you are entitled to get the full information and ensure it’s in the best place possible. Firstly, it will show all the addresses you’ve previously resided at, it has a negative impact on your credit score if you’ve moved around too much. You will be able to see if you are on the voter’s roll, extra points if you are. The report will then go on to show who you have current and previous facilities with (including bank accounts). A great way to get extra points is not to use more than 30 per cent of your limits on the facility. You should then be able to see if you are making your payments on time, unsurprisingly any missed payments have a negative effect but unbeknown to most, making two payments in the same month to a lender can have a positive impact. Lastly, it will also show if you have any ‘written off debts’ against your name. These will automatically stop anyone from lending you more money and stays on your record for at least 7 years. All of this creates your score which then gives the lender an answer on whether they should lend to you. Keep close to what is going on with your credit report and actively work towards increasing it and getting it to the strongest possible position.

Electric Car Finance – answers:

Q: Do you know of any finance companies that specialise in electric vehicles?

A:Thank you so much for asking this question, it is actually a really important question that we all need to know the answers to as the UK government have brought forward their ban on new petrol, diesel and hybrid cars to 2035. This means if you want to buy a brand-new car, understanding your options when it comes to electric cars is even more important.

Most branded dealers will have finance companies available for you to use, it should not make any difference if the car is electric or not. You may well get a better deal with a company that specialises in electric cars than the dealer can offer so make sure you explore the options available to you before committing. There are a few companies such as electriccarlease.co.uk but I would not like to recommend directly as it’s personal preference and depends on which car you are choosing. I hope you find a suitable option for your circumstances.

Q: Are there any differences in financing an electric car through a PCP or HP route, to the petrol/diesel equivalent?

This is an interesting question and not that straightforward to answer. Ultimately what happens when you take out PCP or HP is the monthly payments allow a contribution towards the depreciation of the car, leaving you with the balloon payment at the end as well as an initial payment at the beginning to self-fund. Recent research has shown that electric cars hold 49 per cent of their value in comparison to 40 per cent on a regular car so you could argue that a PCP/HP agreement should be cheaper for an electric car for this reason alone. However, unless you do a direct comparison and have a like-for-like example it is exceedingly difficult to share the differences. As far as choosing a finance company for your car, there are finance companies that specialise in electric cars, but I would argue if a dealer is selling a wide range of cars, then their finance options should suit the wide range of vehicles for sale. As you are asking around financing an electric vehicle, I would also like to remind you that you may find there are many other financial benefits to buying an electric vehicle, like no road tax, so I would urge you calculate the whole value of the purchase when you are comparing an electric vehicle to a petrol/diesel equivalent. I really hope this answers your question.

Q: How much do electric cars cost to charge?

A:Depending on how many miles you do, this is where having an electric car is a no brainer and certainly is a lovely sweetener to the additional fact that they produce no emissions and are more environmentally friendly.

Let us take an average electric car, Nissan Leaf, as an example. This car takes around 6 hours to charge when plugged in at home. So, if we assume your energy charges are 0.14p per kilowatt per hour then this car cost £5.60 every 140 miles, this works out at 4.1 pence per mile. If you compare that to the cost of using petrol to energise a car, you are saving 10.1 pence per mile. It means the savings are immediately clear.

Of course, recharging your car away from your home will be slightly more expensive but not on the same scale as a petrol or diesel car. Another point to mention here is that the government has a grant available for anyone considering setting up a charger at home, and they will contribute up to 75 per cent of the cost of buying and installing the charger, up to a maximum  of £500. The charging cost is often the element potential buyers don’t understand so I really appreciate you asking this question.

 

Car Finance – answers:

Q: Can I cancel my finance agreement early or pay the lump sum off early?

A: I’m so pleased that you asked this question before going ahead with making any over payments. Every credit agreement will be different, so you need to review your individual document to find the answers. If you don’t have your copy, then the lender should be able to share it with you. All too often it is possible to make an early repayment or lump sum payment, normally there is a charge or small penalty. This needs to be added into your calculations, if this charge is higher than the overall interest you will pay then you might like to hold onto the funds until the end.

The other element to consider with repaying early is whether this is the highest interest charging credit agreement you hold. Car finance is typically a much lower interest rate than other facilities such as personal loans or credit cards so if you hold some of these products then you might be better off keeping the finance agreement going and placing your funds towards something with a higher interest rate. This is called debt avalanching – repaying the highest interest debt first.

Whatever you choose to do, it is a great position to be in where you can repay your debts early and please remember that when you do repay any kind of debt, a best practice is to put that normal payment into the next highest interest debt or if you’ve finished repaying debt, then save that money towards an emergency fund to avoid using credit facilities in the future.

 

Q: I have just started a new job after being made redundant due to Covid, and for my new job I need a car. Will it be hard for me to get finance to help with the payment as I have not been with my new employer long?

A: Congratulations on your new job, it’s always exciting when you have a fresh start somewhere. Most lenders will start off by looking at your credit history, therefore this is the best place to start. Reviewing your credit report before you apply, making sure everything is present and correct is of utmost importance. Next up they may ask you for a payslip which you probably have not had yet. Ask the question in advance, maybe a contract would be just as suitable. Just be warned, sometimes probation clauses can be a problem for some lenders and create a negative impact.

Making a conscious decision about applying, weighing all of these things up, can be invaluable as a rejection for car finance can be very damaging to your credit score. It might be that once you’ve reviewed these elements, you decide to hire a car for a few months to give you time to build up your credit score, come out of any probationary period and have some payslips as evidence of your income. Well done for thinking about this in advance of making an application, it’s very wise.

 

Q: What happens if I buy a car with outstanding finance?

A: I would strongly advise against buying a car with any kind of finance still attached to it, ultimately that finance is still tying the previous owner to the vehicle and if you now own it there becomes a liability issue. If finance payments are owed on a car, then the car still belongs to the finance company. Ultimately if you buy a car with finance still attached then you will also inherit the debt still associated with it – this will become your responsibility to settle the debt. Don’t panic too much though as it’s actually illegal to knowingly sell a car with finance still attached so the chances of this happening are very slim.

There are lots of websites you can use to check the vehicle simply with the registration plate, but I would highly recommend this one. You need to be sure that any previous finance is finished or settled before you agree to buy that car; seeing proof of this and checking the registration plate is the best way to be sure this has been completed. Do not accept any written confirmation paperwork, the finance needs to be cleared on the electronic system attached to the registration plate. This is a common concern for anyone buying a second hand car so I hope this gives a bit more clarity around the situation.

 

Q: Could you please tell me what is the difference between PCP and HP finance?

A: Great question, thank you for asking as the jargon around this often puts people off. PCP stands for Personal Contract Purchase, it’s similar to HP finance whereby you make a monthly instalment but the difference being the structure of the overall finance.

With PCP you will often make monthly repayments over three or five years and then at the end of the term you have the option to make a ‘balloon’ payment in order to own the car or you can just hand the car back. For this reason, most people use PCP as an opportunity to change their car every few years but of course this will mean you are always paying monthly for your car.

With HP finance your monthly payments are paying off the credit facility, so at the end of the term you will own the car. You tend to start with a deposit and then the remaining cost is spread over monthly payments. At the end of the finance you will own the car so it will be your choice if you want to trade the vehicle in or keep it. Bear in mind that the car may have depreciated in value.

When you are considering both options some of the questions to ask yourself are, do I want to own this car at the end of the term? Can I afford to start saving towards a ‘balloon’ payment or new deposit at the same time? Will having a monthly car payment affect my other money choices in the long term.

I believe it’s personal preference as to which option you choose based on your personal circumstances, your car requirements and what suits your financial position now and in the future.

 

Q: I have finance on a car I bought a couple of years ago and now I want to upgrade. I am looking to purchase a more expensive car and was wondering how this works for finance – will I add the remaining cost of my old car to the new finance plan? Is it best to stick with the same supplier for an easy transition? 

A: Most dealers will be able to give you a trade-in price for your car considering the finance that still needs to be repaid on it. Getting a settlement figure in advance of trading-in can be helpful for this conversation. Your finance agreement is linked to you and that particular car, so if you choose to part exchange then the finance would be repaid, and you’d start a new agreement for your new car. Going back to the same supplier can make your old car more desirable as they know the car’s history and may have more confidence re-selling it, but this of course will directly impact your choice of new car.

Another option I would recommend would be to repay the finance so that you own the car. This way you can sell it for the highest price, either privately or through the original dealer, and then start over again with your new car. If you do not have the cash savings to do this now, then you could borrow the money temporarily on a personal loan until the car is sold. This way you will be able to sell the old car at the highest possible value without having finance attached to it.

 

Q: I’ve been turned down everywhere for car credit. I really need a car and can afford £50 per week, what can I do?

A: That is a real shame that you have had that experience. I would suggest the first thing you need to do is understand why you have been declined. Review your credit report, what is stopping them from lending to you? You are likely to find that you either have a negative remark on your report, maybe you’ve missed a payment, or it may just be as simple as your credit score being too low. Once you know the full situation you can work on building that credit score back up and finding lenders who would be willing to lend you some money to fund a car.

Depending on what shows within your report you may find that to access funds you will have to use a lender who charges a higher interest rate, in which case you may choose to wait 6 months and see if you can build your credit score to open up some more low cost opportunities. Once you know your credit score you can then start working on where the best place will be to borrow the money. Credit score websites will often suggest great places to borrow funds based on your individual report.

Please also consider the overall cost of maintaining a car within your budgeting, so planning for insurance payments, replacing tyres over time, and paying for an annual service/MOT plus building a pot of money to pay for any ‘wear and tear’. This is often forgotten when thinking about the cost of paying for a car.

 

Q: I am currently saving for a house but also really need a second car as our family has grown. Do I a) take some of my savings from my house fund and have a larger down payment on a used car, but then my own home is further away or b) leave the house fund alone and have a larger monthly payment for the car. Will the extra outgoings for my car finance affect my credit score for a mortgage?

A: I’m so pleased you have had the foresight to take this into consideration, as most people wouldn’t think twice so you’re already a step ahead. Any monthly credit payments will affect the total amount available to you on a mortgage, so in an ideal world you want to keep any monthly credit payments to a minimum. Car payments in the hundreds of pounds can have quite a big effect on mortgage offers, it could be as much as £80k-£100k reduction difference in lending. In addition to that, any credit checks made six to 12 months prior to a mortgage application could have a negative effect on your credit score, especially if you are declined for credit and unfortunately, you’re not going to know the chance of this until you make the application.  A better option may be to buy a less expensive car, use some of your house savings, aiming to not take any car finance and then top the difference up for the house purchase, with one of the many First Time Buyer or 95 per cent mortgage schemes available. Best of luck in achieving your goals and well done once again for making this consideration.

 

Q: I purchased my car a few years ago on PCP. When the agreement comes to an end, I have 3 options: 1) pay the final payment and own the car, 2) return the vehicle OR 3) part exchange the vehicle. 

Which is the most financially viable option in the long run? Considering I would need to maintain an older car with option 1 which may have costs associated and having already paid money for it each month. Or if I hand it back, I don’t get any more for it to buy a new one. Is option 3 the best one perhaps?

A: I think the real questions to ask yourself are, how does my current car support my future requirements? If I make the balloon payment, will I miss out on other money goals I want to put that money towards? This really is personal preference based on your lifestyle and requirements so you may get benefit from reviewing this situation with a financial expert.

Consideration to owning this car is only really appropriate if it fulfils your needs for the next five to seven years and you can make allowances for the cost of running an older car. As you have said, considering the ongoing cost of running a car is an important aspect a lot of people forget about. Making an allowance for a yearly service, MOT, tax, insurance, any repairs required to the car and changing the tyres every few years can be expensive, so saving for these costs on a monthly basis is a best practise. Of course, these figures may be higher for an older car. This is often something forgotten about when committing to a car; it’s not just the monthly price tag that needs budgeting. Returning the car could be a costly option depending on any damages and the mileage so with that in mind, part exchange seems like a sensible option but please remember all the additional costs that come with running a car along with your future requirements for a vehicle and other money goals you may have.

 

Q: I am 18 and a first time buyer and I am looking for some finance options available to me – this will be my first time taking finance on anything (does this affect my chances as I have no credit history?)

A: Firstly, well done on having an awareness around your credit score at 18 years old, most adults have never considered or looked at their credit score even though it’s probably their most important asset. You are absolutely right to protect your credit score as it will really help you unlock many doors as you continue to move into adulthood. The chances of you obtaining car finance are very slim with no history. I would suggest spending the next six to 12 months building your score up before applying for car finance. There are a few simple ways you can do this:

– Review your credit score on a monthly basis, check everything looks correct and analyse if it’s gone up or down.

– Apply for a credit card with a reputable bank, maybe alongside your bank account would be the best option. Use it on a monthly basis but plan to pay it off each month. An additional way to increase your score is to never spend over 30 per cent of the limit and paying it off over two payments will boost you up even further.

– Make as many of your monthly payments automated on direct debits and standing orders. Any payments outside of this do not help build your score in the same way.

– Ensure you are on the voters roll at your home address and don’t change address on your bank account unless absolutely necessary. If you choose to go to university, keep your address as home and add a correspondence address for your university address if need be.

– Use facilities such as a catalogues and mobile phone contracts to have small credit agreements with, as this proves you can borrow money and pay it back.

I’m so pleased this is already on your radar. Please talk to your friends about it as awareness around this subject within your age range needs raising. Your credit score is your most important asset, therefore it needs nurturing, reviewing, growing and maintaining.