Have you checked your credit score lately? Having a good credit score is an important step to getting access to better priced financial products.

A good credit score doesn’t just help if you apply for major financial products such as loans, mortgages or credit cards, it also counts towards gaining access to mobile phone contracts or favourable direct debit terms. And with a little discipline and a lot of motivation, you can use your credit card to your advantage and help yourself to a better credit score.

Of course, first you’ll need to know how to check your credit score. Click here to find out how – don’t worry, I’ll wait until you’re back.

Here are a few simple hints for you to follow that could help build a better credit score using your credit card.

Treat your credit card like a debit card

If you are disciplined and a little pedantic, you can use your credit card instead of your debit card for most purchases. Whether you are paying for your groceries or paying the household bills, make it a point to use your credit card.

Here’s why: Each time you use your credit card, it’s like you’re taking out a small loan (and, after all, if you don’t pay it back, you are!). That means that when you pay off these purchases in full at the end of the month, you’re showing the credit-rating agencies that you are responsible with the credit that is available to you. Namely, you utilise your credit, and pay it back. Demonstrating this behaviour over and again should prove that you are a more reliable credit risk and worthy of a higher credit score.

The one potential trap with this strategy is that because you make purchases on your credit card, your bank balance doesn’t change to show what you’ve spent. It’s only when you pay the card balance off that money comes out of your current account. If you aren’t good at keeping track of your purchases, you could easily spend more than you can pay off. Only spend what you know you can afford to pay back, otherwise it defeats the purpose of using this approach.

Always pay your credit card on time

Payment history is the most important factor that’s considered in your credit score, so make sure to always pay your credit card bill on time, and in full. This will help you avoid negative marks on your credit score as well as avoid any late-payment fees on your next statement. Paying your credit card balance in full each month will enable you to get all the rewards and benefits of having access to credit without the downside of added charges. It will also prove to lenders that you are reliable when it comes to paying back debt.

Here’s a tip: When I pay for my fuel or groceries, I pay it on the credit card. When I get home, I immediately transfer the equivalent amount from my current account into my credit card account. With banking apps, this takes all of 30 seconds and is an easy way to ensure that I don’t overspend. Then I only have a small balance to pay off at the end of the month. And keeping my balance low also helps my credit score, as you’ll see in just a moment!

Keep your balance as low as possible

Constantly running a balance that is close to the maximum limit not only risks you potentially going over your credit limit and paying a charge, but also displays poor financial control to lenders. Just because your credit limit is £2,000, it doesn’t mean you should use all of it.

Lenders also look at a ratio that not many people know about. It’s called your credit utilisation ratio. It’s easy to work out – you just divide the balance owed by your credit limit. If your balance owed is £300 and your credit limit is £1,000, then your credit utilisation ratio is 30% (300/1,000). It is suggested that you try and keep this ratio between 30% to 40%, or lower. Go ahead and work out what yours is now and aim to keep your balance around this mark.

This ratio carries a lot of weight by the credit agencies when working out your credit score. Keeping this ratio as low as possible is one of the easiest ways to improve your credit score and show lenders you can be trusted with higher amounts. Applying the strategy that I outlined in the tip above can help keep your balance and ratio as low as possible.

Takeaway

Using credit cards can be a double-edged sword. Used wisely and with discipline, they can help you build a better credit score. Used foolishly, they can lead to high interest charges and a lower credit score. Be honest with yourself about your credit card behaviour and put in place the steps that will help you achieve a higher credit score.

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MyWalletHero, Fool and The Motley Fool are all trading names of The Motley Fool Ltd. The Motley Fool Ltd is an appointed representative of Richdale Brokers & Financial Services Ltd who are authorised and regulated by the FCA, and we are permitted in this capacity to act as a credit-broker, not a lender, for consumer credit products (our FRN is 422737). The Motley Fool Ltd does not have permissions for, and does not advise on, investment products and services, but may provide information on investment products and services.

The Motley Fool receives compensation from some advertisers who provide products and services that may be covered by our editorial team. It’s one way we make money. But know that our editorial integrity and transparency matters most and our ratings aren’t influenced by compensation. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. The Motley Fool has recommended shares in Lloyds, Tesco and Barclays.

Want to know what your chances are of getting that loan approved or a new credit card at a great rate? Credit scores are a big part of that, since lenders use your credit score when determining your credit worthiness.

The credit reference agencies hold information on you and your borrowing and payment habits, and this is part of the equation that lenders use when deciding whether to approve your application for credit. Lenders also use this information to help determine what APR to charge.

Many people have no clue what their credit score is or how to find out. By following this guide, you’ll not only be able to see your score, but you’ll be able to find out whether there are any details on file that you need to correct. Knowing what your score is and how to improve it could make the difference between getting the representative APR for a loan… and not getting approved at all.

What does my credit score say about me?

Lenders use your credit score to help assess your level of creditworthiness. When you access your score, you will see a rating and a classification that ranges from “very poor” to “excellent”. A lower credit score may indicate a higher risk to the lender, while a higher score can indicate that you are more likely to make the repayments. (Not all credit agencies use the same scoring system. For example, Experian has a score from 0 to 999, and Equifax has a score from 0 to 700.)

Having a poor credit score is not the end of the world, it just means that you may not be offered some credit products or may have to pay a higher APR. The good news is that you can work on improving your credit score to gain access to other products at lower rates.

Who are the credit reference agencies?

There are three main credit reference agencies in the UK. Experian is the largest, and it’s joined by Equifax and TransUnion (formally Callcredit).

Should you check all three agency credit reports?

It’s not a bad idea for sure. Though if you know which credit reference agency the lender you are applying through uses, you could always start with that one.

Also, it is probably best to check at least once a year with all three agencies, in case something is amiss. Make sure you check every detail and do it regularly, especially if you have a major purchase on the horizon. If you are worried that checking frequently will impact your credit score, don’t be. It has no effect on your score.

Beyond the above, if you’re not sure which agency to check with first, Experian is the largest so it makes sense to start there. Experian allows you to check your score for free once a month.

How do I check my credit score?

Now that you are ready to find out your score, the process is quite simple. You can check online in a matter of minutes. I checked my Experian score on my phone recently and had my score within 10 minutes. You’ll need a few personal details, including:

• name,
• date of birth,
• phone number,
• driving licence/passport number and
• addresses for the past three years.

You can go to the websites of the three credit reference agencies mentioned above and sign up for a free account. There are also sites that check multiple agencies at once (such as checkmyfile and clearscore). Be mindful that some sites require you to put your credit card number in to sign up for the free 30-day trial, and if you forget to deactivate the account before the time is up, you will be paying a monthly fee.

Of note to international users: Some sites require three years of UK address history, otherwise you cannot progress with the enquiry.

What details should I check to improve my credit score?

If there are details in your credit history that are outdated or simply incorrect, they can affect your credit score, so it’s a very good idea to check carefully through your report, and pay special attention to the following.

• Check for old addresses on accounts – If you have an open account listed at an old address, this can cause confusion with ID checks and drag down your score. It’s usually a good idea to close these accounts ASAP.
• Correct any errors – If you believe there is an error on your credit check file, challenge it! For example, this could be an old payment that you have paid off, but the company wrongly informed the agency that you hadn’t. To correct an error, there are a few options. You can write to the lender that put the details on your file, make a complaint to the Financial Ombudsman Service or add a notice of correction to your credit file. Each agency varies slightly in how you should add the notice of correction. If you are subscribed to the service, you can add a note to your file online or send the correction to the agency via the post. You can contact the agency for specific details.
• Make sure you don’t have any joint accounts from the past – If you were in a house share or a relationship that has run its course, it’s important to close those joint bank and utility accounts. Otherwise you could be disadvantaged by the behaviour of someone else.
• Always check your credit report after an application is rejected – Find out from the lender why you were rejected and which agency it used. Was it because you need more time to build up a better credit score? Or was there something specific that caused your application to be rejected?
• See whether you have any open but unused credit or store cards on file – It can be a good idea to close these, as they are included in your tally of available credit. Lenders may think that you have access to too much credit and refuse you on these grounds.

Now you have all the information to go and check your credit score for free. That means it’s time to take action and actually check your score. What’s the worst that can happen? Even if you find out that you have a bad score, the good news is that you can now do something about it.

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MyWalletHero, Fool and The Motley Fool are all trading names of The Motley Fool Ltd. The Motley Fool Ltd is an appointed representative of Richdale Brokers & Financial Services Ltd who are authorised and regulated by the FCA, and we are permitted in this capacity to act as a credit-broker, not a lender, for consumer credit products (our FRN is 422737). The Motley Fool Ltd does not have permissions for, and does not advise on, investment products and services, but may provide information on investment products and services.

The Motley Fool receives compensation from some advertisers who provide products and services that may be covered by our editorial team. It’s one way we make money. But know that our editorial integrity and transparency matters most and our ratings aren’t influenced by compensation. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. The Motley Fool has recommended shares in Lloyds, Tesco and Barclays.

Buying your first parcel of shares can seem daunting. So if you’re feeling a bit nervous as you prepare to click the “buy” button, know that you’re far from alone.

How do I know this? I know because I was nervous myself when I started out on my investing journey. But I was convinced that investing in shares would be good for my long-term financial prospects. So I took the plunge, and I’m glad I did.

However, during my investing journey I’ve learned quite a few things that have helped me become a better, more confident investor. I believe the following three things could help you calm your nerves and avoid making any rash decisions as you prepare to buy your first shares.

Decide how much to invest

You’ve worked and saved hard for your money, so you don’t want to gamble with it. That means that you need work out how much of it you are willing to invest.

There are two primary ways you could go about this. The first option is to back into how much to invest. This works well if you have a particular financial goal in mind. For instance, if you’re investing primarily for retirement, you can work out how much money you’ll need for a comfortable retirement, then work backwards to calculate how much you need to save per month to get there. You can use the same basic process if you’re saving to make a big purchase, like a home.

Running through the particulars of the calculations is beyond the scope of this article, but there are online calculators that can help with this, or you can tackle it with a spreadsheet.

The other option is that you can use your budget to help you figure out how much you can afford to invest. Consider what you need for essential living expenses such as mortgage/rent payments, food, transport and utility bills. With the money that’s left, you can build up your funds for investing.

If you can’t set aside a lot of money every month, it may mean that you only invest three or four times a year, but that’s ok. Slow and steady wins the race. It will also give you time to research the companies that you’d like to invest in.

By taking the time to understand what money you have available to invest, and making sure that it’s not money that you’ll need in the next few years, you may find that it’s already a bit less nerve-wracking to make that first share investment.

Research the companies that you’re investing in

Investing is the most daunting when it feels like you’re throwing your money into a black hole. That’s why doing research on the companies that you’re investing in can be so beneficial. Not only might that help you notch better investing returns, but it can also make you feel more comfortable about your share investments.

But how exactly do you go about researching a company? This is another question that could fill a book. But to get you started, here are three questions that I like to ask each time I’m researching a company myself:

• Is it profitable? Although there are investors that like the high risk of high-flying, but unprofitable companies, I like to invest in companies that are making money, and therefore, profitable.
• Do I trust the company’s leadership? Before I put my hard-earned money at risk, I like to look for a leadership team that I think acts in an upright, trustworthy manner. If a company is plagued by scandals, it’s not an investment for me.
• What do the experts say? Be careful here, because experts can be wrong, and we don’t want to be lemmings. However, I accept that I don’t know everything, so I like to read lots of different viewpoints on a company before I invest. In the end, I make my own investing decisions, but if many experts think a company is poorly positioned, I take that very seriously.

There’s a lot more research that you can do, but if you’re starting from square one, if you dig in with just these three questions, I’ll bet you’ll feel a lot more confident once you’re done. At the end of the day, nobody’s going to care more about your money than you. So you don’t want to blindly rush into an investment decision.

Invest for the long term, not for quick gains

If you ask me, investing is a long-term game. My experience has been that people who think they can make a quick buck inevitably come unstuck.

The problem with investing for short-term gains is that as you look at share-market returns over increasingly shorter periods of time, the probability of ending up with a profit or a loss starts to approach 50/50. In other words, your “investing” starts to look a lot more like flipping a coin.

On the other hand, as you start to look at increasingly longer periods of time, the probability of your investments ending up with a profit, tends to increase. A good example of this is the FTSE 100 in the wake of the Global Financial Crisis. Although that was one of the worst share-market crashes in memory, the FTSE is trading higher today than it was at the peak of the market, right before the crash.

By having, and keeping, a long-term perspective as you invest, you may find yourself with far fewer investing-related jitters. That’s because you’ll know that you’re investing with a strategy that has worked well, and led to a better chance for positive investment returns. To be sure, there’s no guarantee that the future will work out like the past, but when I’m given the choice, I prefer to go with what’s worked well for a very long time.

But do keep this in mind: Investing for the long term will only keep your investing nerves at bay if you behave as if you’re investing for the long term. That means that you’re not checking your share prices on a daily or hourly basis. That kind of behaviour not only can lead to rash investing decisions, but can be a major source of needless stress.

Takeaway

So yes, making that very first investment in shares can be a bit daunting. But if you’re reading this, I assume that you’ve read up on share investing and have seen that many investors have enjoyed attractive investment returns by making smart, sensible investments in shares.

If you’re looking to get over that final hurdle and actually press the “buy” button to purchase your first shares, I think the tips I’ve shared here could help. Namely, if you’ve:

• worked out how much you can afford to invest;
• done your research to understand the companies you’re planning on investing in; and
• committed yourself to investing for the long term…

then I think you’ll find those nerves calming down a good bit as you prepare to embark on your own investing journey.

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MyWalletHero, Fool and The Motley Fool are all trading names of The Motley Fool Ltd. The Motley Fool Ltd is an Appointed Representative of Richdale Brokers & Financial Services Ltd, (FRN: 422737) for acting as a credit-broker, not a lender, for consumer credit products.

The Motley Fool receives compensation from some advertisers who provide products and services that may be covered by our editorial team. It’s one way we make money. But know that our editorial integrity and transparency matters most and our ratings aren’t influenced by compensation. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. The Motley Fool has recommended shares in Lloyds, Tesco and Barclays.

You’ve made the decision: You want to take control of your financial destiny. But how do you know you are choosing the right online share dealing broker?

With the continual addition of new online share brokers, it can be a challenge to find one that meets your needs, but isn’t going to charge excessive admin or trading costs. The following points are what I take in to account when evaluating brokers.

First: Three critical questions

1. What type of investor are you? Are you an inexperienced, casual investor; an active trader; or an expert investor? This will impact the features you’re looking for in an online broker and their dealing platform. From the ease of use of the platform through to the volume and type of company research and analysis available, it’s crucial that the platform matches your investing needs. If you are new to investing, then a platform with greater access to research and educational content may suit you better.
2. How often will you trade? Fees are always a key part of the equation with a broker, but the more frequently you trade each month, the more likely you will need to consider the fees that are charged with each trade. This cost can add up very quickly. If you are more active, then you may want greater access to company analysis and research.
3. What products will you be trading? Shares are probably the security you’re most likely to trade, but you may want to trade a wider range of securities, so check to see the platform offers these options. You may also consider whether you want access to international shares or just UK shares.

Next: Consider the features

Once you have established what type of investor you are likely to be, the following features should be considered when comparing rival platforms.

• Fees. This probably isn’t breaking news to you, but every online dealing platform will charge you a fee for your buy and sell transaction. Fees range from £1.75 through to more than £12. For larger trades, fees may be calculated as a percentage of the transaction amount. Some brokers will also charge an ongoing annual or monthly fee on top of this if they provide extra features such as research or recommendations.
• What and where can you trade? The better dealing platforms will allow you access not only to UK listed shares but also international markets, giving you the ability to invest in companies from around the globe. Check on the types of securities that the dealing platform allows you to invest in. You may only wish to buy and sell shares, but other products may interest you. Such as: options, shorts, ETFs, indices, currencies and more.
• Transaction options. When it’s time to buy and sell products, you may want to consider what options the platform offers. Can you place your buy and sell orders at market, at limit or conditionally? Does the platform allow you to put in stop loss and take profit orders as an option to add more flexibility to your investing? Depending on your investing style, that could help push you towards or away from a broker. However, if you’re new to investing and much of that sounded like gibberish to you, that’s ok! For most investors, having the ability to transact at market and to place limit orders is enough, and I haven’t run across a broker that doesn’t offer that.
• Useability and mobility. How easy is the platform to use? Does the platform offer market depth information? Are the prices real-time or on a time delay? Look for a platform that allows you to move effortlessly across the site so you can make good decisions based on accurate, up-to-date information. Not all platforms offer mobile apps, and some that do don’t offer mobile trading. If staying in touch and having the option to transact while you are out of the office or home is important to you, then look for a platform that offers a quality app.
• Research. Many platforms offer some type of research, analysis and buy/sell recommendations. Some of these recommendations need closer scrutiny, as it’s in the platforms’ interest for you to invest and trade more, but they can usually at least be used as an additional source of information. You should always do your own research to back up any recommendations you receive.
• Education. Does the platform offer any educational content and resources? This is especially important for the beginning investor. How-to guides, explanations of terms and webinars, all help you get the most out of your trading account.
• Security. How secure is the platform and what measures are in place to ensure the safety of your funds? Has the platform had any security breaches in the past? What processes are in place to deal with fraudulent activity? These are important questions for a platform to provide, as no-one wants to have their capital at risk to cyber theft.
• Investor support. What support can the platform provide when you need it most? What are the hours of support that are provided? Is it 24/7 or 9am to 5pm? Try and look for a platform that offers a combination of online, phone, email and live chat support.

Finally: Bring it all together

Hopefully this has helped you gain some insight into yourself as an investor, as well as the share dealing offerings that are out there. As with every product, there are features and product designs that are ideal for some people… but not so ideal for others. And while missing out on features important to you can lead to a bad experience, choosing a product with features you don’t need can land you with higher fees than necessary.

By considering the above factors, I hope you’ll be able to narrow down your choices to the share dealing broker that best suits your needs.

Ready find a great broker? Check out our list of the best online share-dealing accounts

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MyWalletHero, Fool and The Motley Fool are all trading names of The Motley Fool Ltd. The Motley Fool Ltd is an Appointed Representative of Richdale Brokers & Financial Services Ltd, (FRN: 422737) for acting as a credit-broker, not a lender, for consumer credit products.

The Motley Fool receives compensation from some advertisers who provide products and services that may be covered by our editorial team. It’s one way we make money. But know that our editorial integrity and transparency matters most and our ratings aren’t influenced by compensation. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. The Motley Fool has recommended shares in Lloyds, Tesco and Barclays.

Free trades. Lower dealing charges. No fees.

Even if you are happy with your current online share dealing broker, these kinds of offers can naturally lead you to wonder: Should I switch brokers?

I get it, I often have the same thought occur to me.

So should you change to a new platform or stick with the tried and tested? Here are four reasons that you can take into consideration if you’re considering changing brokers.

Fees and charges

When you make a trade, you cannot control if the share price goes up or down. But you can control how much you pay for a trade, and what fees you pay to access the platform.

If you make frequent trades, the fees can add up very quickly. Calculate how many trades you made last year and compare what the dealing charges would be with other platforms. Do the other platforms offer a frequent trader discount? Do they charge less on a higher trade amount? What are the fees on a £1,000 trade compared to a £5,000 trade? Are there any annual or quarterly charges?

By actually calculating the difference, you put yourself in a better position to make an informed decision with regard to different fee structures.

Keep in mind that low fees are just one piece of the puzzle to consider. Just because a platform has the lowest fees, doesn’t necessarily mean it is better or worse than a higher-fee platform.

Education and research

Your investor “type”, your experience level, and the sources you typically use for investment research may determine the platform that you choose.

If you are a beginner, you may choose a platform that offers some educational videos/webinars that can help you understand how the share market and the platform works. Extra free trades or a slightly lower dealing charge may not be worth sacrificing these resources. On the other hand, a more experienced investor may not worry about the education content on a platform.

At the same time, having access to good, reliable research is important for any investor. Quality research helps investors make informed, and hopefully better, decisions. Different platforms have access to different research providers, and this may be reflected in the fees that the broker charges. Information costs money, after all.

If it is likely that the broker will be your major source of information, then you may want a platform that can offer you the best research at a competitive price. If you source your research elsewhere (like The Motley Fool, for instance!), the cheaper platform that doesn’t offer any research or education could make more sense.

When considering the switch, if it may save you fees while costing you access to research and education that you rely on, then you may want to press pause. But if you can find a new broker that can potentially save you money and offer you additional research or education, then that’s great!

Platforms and tools

Do you prefer to use a desktop to place your trades and view your portfolio, or are you happier using a tablet or mobile phone?

In our connected world, most platforms will be accessible via multiple devices, but their usability on different devices could vary, and may influence your decision. Some platforms have high-quality share screeners that can help you narrow down investment ideas across many variables, while other platforms have more basic screeners with less functionality. Note making and journaling is slowly creeping into some platforms, so that you can review your investment decisions later on.

If you know that you want features that your current broker doesn’t offer, that can help push you to switch. But if you like certain features that your current broker offers, you better make sure the new broker offers them before making the jump.

Investment offerings

If you’ve ever felt constricted by the investment offerings at your broker, this could be a further enticement to make a switch.

What products does your current platform offer compared to its competitors? What markets do you invest in? Do you only go long equities or do you short, take options and puts or invest in ETF’s and funds? These are some of the questions you need to ask yourself when you are looking at changing trading brokers. If you are just investing in equities on the London Stock Exchange, then you may not need access to these other products and markets. But if you think that in the future you may want to trade these products and markets, then this may influence your decision.

Making the switch… or not

Is it just about cost and saving a few quid on dealing fees? Or do you want access to education and research, or certain markets and products?

Carefully considering the four factors above and make a list of what you want out of a platform. Work your way through each platform and make notes to see which one is best suited to you. When you narrow down the field, you may be able to take a trial on the account to see if it matches your expectations.

Thinking about making a switch? Check out our top share-dealing brokers

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MyWalletHero, Fool and The Motley Fool are all trading names of The Motley Fool Ltd. The Motley Fool Ltd is an Appointed Representative of Richdale Brokers & Financial Services Ltd, (FRN: 422737) for acting as a credit-broker, not a lender, for consumer credit products.

The Motley Fool receives compensation from some advertisers who provide products and services that may be covered by our editorial team. It’s one way we make money. But know that our editorial integrity and transparency matters most and our ratings aren’t influenced by compensation. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. The Motley Fool has recommended shares in Lloyds, Tesco and Barclays.

So… where do you start? Who can you trust with your money? You likely have a hundred questions racing through your mind.

I’m here to answer a few of those questions and help you understand what you need to do to take the first steps in opening an online trading account.

Step 1: Choosing the online trading platform that’s right for you.

Online share trading is usually the cheapest and easiest way to purchase shares. These platforms allow you to buy and sell shares, not only on the London Stock Exchange (LSE), but often many international stock exchanges as well.

But there’s a little work ahead, as you will need to compare the various trading platforms and find the one that best suits your needs. Here are some things to consider when comparing trading platforms:

• Platform fees: This is the fee that you are charged every time you buy or sell shares. Depending on the platform and the size of the transaction, this charge could be a flat fee, a percentage of the total transaction cost, or a combination of both. Some platforms may charge a monthly or annual fee as well as transfer and exit fees.
• Where can you trade: Some platforms offer access only to the LSE, while others allow you to trade on stock exchanges all around the globe.
• Ease of use: Consider how interactive and user-friendly each platform is for the type of investor that you want to be. Some providers give you the option of a free demonstration account for a short period so you can trial the features they offer.
• Who is the platform’s target audience: Some trading platforms are designed with the infrequent casual investor in mind, while others are suited to more active and experienced traders. If you can trial the account for a period of time, it may become apparent to who the platform is more suited to.
• Customer support: Can you get in touch with customer service if you need to ask a question or have an issue? If something goes wrong with your trade you may want to be able to speak to someone ASAP, rather than be forced to email or review FAQs.
• Education and research: The type of investor you are may determine how much education or company research you would like access to. If you are a beginner, then you should probably look to a platform that has more educational content so that you can learn about shares and investing (you can also find plenty of that at The Motley Fool, like this article here). If you are looking to do some research on your own, then a platform that allows you access to analysis and charting tools may be a better fit for you. If you follow a share advisory service (like The Fool) then you may wish to let them do all the research and you just purchase the shares on their recommendations. In that case, you may not need the research tools.

Step 2: Sign up for an account.

Once you have decided which platform to go with, it’s time to register for an account. This can be done completely online. If you are a new customer, some details that you will need to provide at the beginning of the process include your bank details (to transfer money in and out of the platform) and proof of ID. Before you can trade most platforms will require you to scan a copy of your identification documents for verification. You will also usually be asked to deposit a minimum amount to open the account.

Once your documents are verified and you have money in the account… you can begin investing!

Step 3: Choose which shares you want to buy

Now comes the moment of truth. Which company’s shares are you going to buy? You may have already narrowed it down to a handful of companies, but if not, you’ll have to do your homework to find out which companies match your investment goals.

Depending on the platform you chose, you may be able to access research, analysis and potentially trading recommendations, or you may need to go to individual company’s websites to look through past financial statements and company announcements to determine their suitability. (Did I mention that you can find a lot of research and commentary at Fool.co.uk?)

You’ll also need to consider the number of shares you wish to buy. This will come down to your budget and investment goals. There is no minimum amount to purchase from the LSE, but most platforms will have a minimum amount that you need to spend.

Be mindful of the trading fees (both buying and selling) that the platform charges, as buying too small a parcel of shares will mean that fees end up a higher percentage of your investment and the shares will need to increase a considerable amount just to break even. For example, if your platform charges you £10 per trade and you purchase £400 of shares, then that is 2.50% of the trade (just for purchasing), whereas if you purchase £1,500 of shares, then it is 0.67% of the trade.

So, there you have it. Opening an online share trading account to purchase your first parcel of shares isn’t as scary as it sounds. Follow these simple steps to get started and enjoy the journey.

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