Finding you the best credit cards for bad credit on the market.
Getting approved for a credit card can be difficult if you have a poor credit history. If you’re struggling to get approved, credit cards for bad credit can help. Use our guide to learn more and find the best card for you.
What is a credit card for bad credit?
Credit cards for bad credit work the same as normal credit cards.
The difference is it’s easier to be approved for a credit card for bad credit, but you’ll be charged a higher interest rate and offered a lower credit limit compared to credit cards offered to people with good credit ratings.
Credit cards for bad credit allow you to borrow up to a agreed amount and you then pay back what you’ve borrowed. Interest will be added if you don’t pay back the balance within a month.
Credit cards for bad credit ratings can be used to help people build a better credit report because they demonstrate to future lenders you’re a reliable borrower.
What is considered bad credit?
Bad credit means you have a poor credit history. Your credit report is considered poor when your credit rating falls below a certain score, although this score isn’t universal.
There are three leading credit reference agencies in the UK. These companies provide your credit information to lenders and credit card providers. The agencies use different scoring, so what’s considered ‘bad’ will differ between all three.
Experian – Scale from 0-999. A score below 720 is considered poor.
Equifax – Scale from 0-1,000. A score below 438 is poor.
TransUnion – Scale from 0-710. A score below 565 is thought to be poor.
There are many common reasons why you may have a poor credit rating. Some factors which could cause you to have a poor credit score include:
- You’ve not used a credit product before, so you don’t have a credit history
- You’ve had a CCJ filed against you
- You’ve been declared bankrupt
- You’ve mismanaged previous cards or loans
- You’re not currently registered to vote
- You’ve recently moved to the UK
Am I eligible for a bad credit card?
If you have a poor credit history, you’re not guaranteed to be accepted for a credit card, even when applying for a bad credit card.
To make sure you’re not unnecessarily applying for cards you won’t be approved for, it’s helpful to use an eligibility checker to find cards you’re more likely to qualify for before you apply.
A hard search is performed on your credit report when applying for a bad credit card. A hard search looks at your credit history in detail and leaves a mark to show one has been done. Future lenders will be able to see this mark, and too many hard searches in a short period of time can harm your credit rating, making it even tougher to get a credit card.
So, before applying for credit cards for very bad credit, check your eligibility to prevent multiple hard searches.
To get any credit card in the UK, you need to be over 18 and have a permanent address in the UK.
Can I improve my credit score?
Across all the different credit rating agencies, your credit score is constantly changing, meaning you always have the opportunity to improve your credit rating to boost your chances of getting the credit cards you want.
Improving your credit score for Experian, Equifax, or TransUnion may take some work and some discipline, and what improves your score for one company may not for the other.
Although it’s possible to get credit cards for no credit or bad credit, improving your credit score will make it easier for you.
Things you can do to work towards improving your credit score include:
- Registering to vote
- Updating or correcting details on your credit report
- Avoiding late repayments on current credit products
- Keeping old accounts open to build a credit history
- Staying well within your credit limit. To build a good credit rating, remain under 30% of your total credit limit
- Avoid making cash withdrawals on a credit card
- Paying off any existing debt
As well as the above, one of the best ways to improve your credit rating is to use a credit product and manage it well. That’s why low credit score credit cards can be useful, because paying off what you’ve borrowed and keeping up with your minimum monthly payments can help prove you’re a reliable borrower, boosting your score.
While your credit score improves, you may find your credit limit on your card rises over time.
What are the pros and cons of credit cards for poor credit?
- They can be used to improve your credit rating
- Card purchases are protected with section 75 cover. This is where the card issuer can easily refund purchases between £100 and £30,000 if there’s a problem with your purchase
- You’re more likely to be accepted if you have a poor credit history
- Low credit limits
- High interest rates
- Risk of getting into debt if not managed well
Are there any alternatives to credit cards for bad credit?
Credit cards aren’t the only products you can turn to if you have a bad credit history.
If you need to borrow money to help cover a significant expense, you could also look into applying for loans for bad credit. Like credit cards for bad credit, you’re more likely to be approved for bad credit loans with a poor credit report; however, they’ll likely have high-interest rates and charge expensive fees.
An overdraft facility may also be an option if you need to borrow a small amount of money. An overdraft is where you borrow money from your current account. This can be useful if you need low amounts, although the fees for using your overdraft can be expensive.
Payday loans can also be an alternative if you’re confident you’ll be able to quickly pay the amount back in full. Because of the high interest rates, these loans are better if you’re borrowing a low amount – ideally no more than £150. Payday loans are expected to be paid back within a month, and if you default on your repayments, a payday loan can become a very expensive form of borrowing.
Credit cards for bad credit FAQs
Can I get a credit card with really bad credit?
Although bad credit cards are designed for those with a poor credit rating, you still may struggle to get approved for one if your credit score is very poor.
If you do find a lender willing to approve your application, you’ll likely be charged a high interest rate and have a low credit limit.
To be in with a chance of getting approval for the best credit card deals, spending time to improve your credit history will be your best option.
Can I get a credit card without a job?
You do not need to have a job to get a credit card. However, you will be required to have regular income to show you can afford your bills and repayments.
This required income can come from anywhere, including universal credit, pensions, or inheritance. As long as you have a consistent cash flow, you should be able to get a credit card.
Why can’t I get a credit card?
When lenders check your eligibility for a credit card, card issuers look at two things: your credit report and your affordability. If your application is unsuccessful, it may be because you don’t have enough income to demonstrate you can cover the costs of the card, or it may mean your credit score is too low.
It’s possible you may be applying for credit cards with eligibility criteria that are too strict for your current financial circumstances. Use a free credit card eligibility checker to understand which cards you have a greater chance of being approved for.
How long should I wait to apply for another credit card after being denied?
You should wait at least six months between hard credit searches because this is when the searches stop influencing your credit rating.
When you apply for a credit card, the issuer will conduct a hard credit search on your credit report. This search looks at your credit history and leaves a mark on your file other lenders and card providers can see.
Too many marks from a hard credit search in a short time will likely harm your credit report because it suggests to lenders you’re desperate for cash.