If you’ve got poor credit or no credit, it can be difficult to get a credit card. But specially designed credit cards for bad credit, or no credit, are designed for people just like you.
There’s a whole market dedicated to credit cards for bad credit. Sometimes people call them ‘bad credit cards’ or ‘poor credit cards’. They are also more commonly known as credit building credit cards.
Who are credit builder credit cards meant for?
Credit building credit cards are for those trying to improve their credit score, They can also be useful for those who are unable to qualify for the best deals in the market.
Some reasons for that could be:
You've declared bankruptcy in the past
You've had a county court judgement (CCJ) against your name
You have no history of borrowing or have never had a credit card
You have a record of missed payments
You're not registered on the electoral roll
Credit building credit cards can be a good way to rebuild your credit record if you have poor credit history. But you'll have to make your repayments on time and not miss any payments. They are also just as useful in building your credit score if you have no credit history and are applying for your first credit card.
How can you improve your credit record with credit building credit cards?
If you use a credit builder card carefully, you could improve your credit record. By making repayments on time and staying within your credit limit for several months - typically about six months - you'll soon start making a difference.
Paying back what you borrow on time looks good to banks and providers, even if you’ve had debt problems in the past. Credit builder cards are a good way of proving you can pay back what you borrow. Then you might get a better credit score next time your finances are looked into.
Having one of these credit cards to build credit should make it easier for you to get accepted for credit cards, mortgages and loans in future. You’ll also have more options open to you, so you’ll have a better chance of being able to get the best ones on the market.
Who can get one of the credit cards for poor credit?
Low credit score credit cards generally have lower eligibility criteria than other credit cards. Some credit cards for very bad credit even accept people who’ve been bankrupt or had a County Court Judgment against them.
Once you’ve had one of these credit building cards for a while, your lender might feel you’ve proved yourself as a good borrower. Then they might increase your credit limit or lower the APR on your card.
It’s a good idea to find out which credit builder cards, UK wide, are most likely to accept you. You should only apply for a card with the highest chance of approval. Don’t apply for too many as this could damage your credit record further.
How do I apply for a credit card to build credit?
The process to apply is simple. Follow these steps.
Check out credit building credit cards in our table.
Filter the results according to your needs.
Use the eligibility checker to check if you fit criteria.
Find out more – click ‘See deal’.
Apply for credit card with bad credit.
Don’t worry about using the eligibility checker. It’s a ‘soft check’ which means it won’t affect your credit rating.
What are the features of a credit builder card?
Credit cards for people with bad credit usually have lower, more manageable credit limits usually from £100 up to £1000. They also tend to have much higher interest rates than other types of credit cards. This means you’ll need to use the card sensibly to rebuild your credit record.
Try to see your credit builder card purely as a way to build your credit, rather than using it to make large purchases. It's a way to establish good borrowing practices and show lenders that you can be a responsible borrower. So if you use it for general expenses and pay off the balance in full every month, you won't pay any interest and the low credit limit won't matter.
How to use a credit builder card
With low credit credit cards, you’re more likely to rebuild your credit record if you can show that you’re a reliable borrower.
You can do this by:
Always paying back what you spend each month in full
Staying in your credit limit by keeping track of your spending through online banking
Avoiding cash withdrawals on your credit card.
Ideally, avoid accumulating a balance of more than 50% of your credit limit, because that impacts your credit utilisation ratio and can affect your credit score.
You’ll need to be patient as it can take a while for your credit score to increase.
Avoid making things worse
Even with the best credit cards to build credit, there’s still a chance you could harm your credit record further.
When you get your credit card to build credit, you’ll need to avoid making the following mistakes. You could harm your credit record if you:
Miss payments on your credit card
Go over your credit limit
Apply for cards that reject you
Get into too much debt.
Here’s how to use your credit card so you can avoid fees, and not increase your debt.
Unable to repay in full?
Even the best credit cards for bad credit have a higher APR than normal credit cards. You’ll have to pay interest if you don’t repay your bill in full every month. So choose a credit card to build credit which has as low an APR as possible to keep your costs down.
Never had a credit card before?
If you’ve never taken out any form of credit before, like a mortgage, loan or credit card, you’ll have no credit history. This can make it harder to get most credit cards.
Credit builder cards for bad credit can be a good place to start. Using one of the credit cards for bad credit in our table can help to build your credit history, as long as you use it carefully.
Are there any no credit check credit cards?
No credit check credit cards don’t exist in the UK. Any lender will want to do a credit check to find out your history.
But there are lots of cards available for people with poor or no credit history. You’re better off looking at credit building credit cards and trying to improve your credit score than trying to bypass a credit check.
Are they any alternatives to credit builder credit cards?
There are some prepaid cards that offer credit-building facilities. Prepaid cards require you to load cash onto them before you spend. The credit-building facility is when the card provider essentially "lends" you a year’s total of monthly card fees up front.
Although the loan is interest free, you are expected to repay it over the course of 12 months. As you pay off the monthly card fees, the credit provider reports that you've been paying the fees back on time to credit reference agencies, your credit score should get an uptick.
Are there any tips when it comes to credit building credit cards?
When it comes to finding credit cards for really bad credit, there are a few simple tips you should remember:
Don’t apply for cards you’re not likely to get, and don’t make multiple applications
Use our eligibility checker before you apply
Compare credit cards for bad credit using our table
Check the APR and try to choose a lower one
Use credit builder cards carefully – pay them off in full and make repayments on time
Be patient – a good credit score can take time to build or rebuild.