Taking out a loan to get a good credit rating?

G

Guelder

Registered User
Messages
56
I've heard of people doing this before but I'm not sure if there's any basis in it..

I'm thinking of taking out a loan which I do not need simply so I can repay it on time each and every month in the hope of showing a good credit record and ability to pay back loans on time etc..

Does this make any sense or would it be nonsense?

Also would it be possible to pay off the loan early in a lump sum?
 
I've heard of people doing this to get a credit rating, so maybe not nonsense. If you're going to do it, just make sure you get a variable rather than fixed rate so that you can pay it back early. Fixed rate loans could carry a penalty if you pay it off early.
 
We don't have a credit rating agency in this country per se. What we do have is an organisation called the Irish Credit Bureau, who maintain record of credit defaults and late payments. If you're not on their list, your credit rating is perfect.
 
I'd apply for a credit card which will cost nothing other than the €30 annual Government levy (assuming the balance is paid in full each month) if I was looking to do this, loans cost a packet in interest
 
Last edited:
Raskolnikov said:
We don't have a credit rating agency in this country per se. What we do have is an organisation called the Irish Credit Bureau, who maintain record of credit defaults and late payments. If you're not on their list, your credit rating is perfect.
Click to expand...
This is not true if you apply for a Tesco credit card. If you have never had a loan in your name, you don't exist as far as they are concerned (this is what they and the Irish Credit Bureau told me!).
 
Raskolnikov said:
If you're not on their list, your credit rating is perfect.
Click to expand...
I wouldn't agree that it's quite so black and white.

If you've no missed payments listed on your ICB report, you've no serious black mark against your name but this doesn't mean your credit rating is perfect. The ICB doesn't provide a credit rating, but the banks will produce a credit rating in house based on your ICB report and other relevant details (income, outgoings, debts, history, etc.).
 
Is the OP looking to get the loan, so that they actually can get a credit history? If they have no loans previously, would I be correct in saying they have no credit history whatsoever? This might hinder them if they wanted to get a mortgage etc. in future years?
 
PaddyW said:
This might hinder them if they wanted to get a mortgage etc. in future years?
Click to expand...

It won't hinder them on the mortgage side as the lenders here do not credit score applicants like they do in the UK, they just make sure that there is no adverse credit history.

As yoganmahew has said, Tesco are different. I guess this is because they use a similar system of credit scoring for their credit applications here as they do in the UK so if you have no record of paying loans then they will not advance credit.
 
You must log in or register to reply here.
Menu
Log in
Register