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Constance asks:

I'm a student and when I graduate I hope to have saved enough to put a deposit down on my own home. I have an investment ISA (which is actively managed) and pay into it as regularly as I can, although my funds are restricted.

My first question is, I have been told that in order to build up my credit rating (which I need to apply for a mortgage), I'll need to have a credit card. Is this true or does the fact that I pay monthly bills count toward my credit ratings?

Secondly, is an investment ISA a good investment option for a student? I understand the risks associated with it, but it's the only way I can ensure I don't take money out. Thanks.
Karen Ritchie
Savings, Investments & Pensions

In terms of your credit rating getting a credit card will help, as long as you use it perfectly. Other things to consider are:

  • have you checked your current credit score? Credit monitoring services such as Credit Expert are currently offering a 30 day free trial
  • are you on the electoral roll?

There are various websites that can assist with getting or improving your credit score and armed with your current rating I'd suggest you read an article on SavvyWoman called how to improve your credit score.

It does concern me that you are using an investment ISA to build up your house deposit. If you only have a few years before you plan to withdraw the funds there is a huge risk that you could end up with less than you invested. On the other hand you could be lucky and the investment could go up in value. Can you afford to take the risk that the money does fall in value? If that happens will you be willing to wait to get on to the housing ladder until the value recovers, which could be some time?


If you have no other funds to call upon I would recommend that you start with a cash ISA - you could still pay in lump sums or regular monthly amounts and you could opt for a postal account if you wanted to make it more difficult to access the money. The potential return may not be as good but the the money you invest will not be at risk of a fall in value.

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