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Compare credit cards for bad credit

  • If you have bad credit, see how specialist credit builder cards can help.
  • Get a Limited Editions Sleepy Oleg toy on your first successful application*. Don’t forget to claim your toy within 10 days of applying for your credit card. Ends 14 December. 
  • If you have bad credit, see how specialist credit builder cards can help.
  • Get a Limited Editions Sleepy Oleg toy on your first successful application*. Don’t forget to claim your toy within 10 days of applying for your credit card. Ends 14 December. 
  • If you have bad credit, see how specialist credit builder cards can help.
  • Get a Limited Editions Sleepy Oleg toy on your first successful application*. Don’t forget to claim your toy within 10 days of applying for your credit card. Ends 14 December. 
  • If you have bad credit, see how specialist credit builder cards can help.
  • Get a Limited Editions Sleepy Oleg toy on your first successful application*. Don’t forget to claim your toy within 10 days of applying for your credit card. Ends 14 December. 
  • If you have bad credit, see how specialist credit builder cards can help.
  • Get a Limited Editions Sleepy Oleg toy on your first successful application*. Don’t forget to claim your toy within 10 days of applying for your credit card. Ends 14 December. 

Credit builder cards

If you have a bad credit rating and you’re worried about your low credit score, then a credit building card could help you out. Learn how, if used in the right way, this type of card can work for you while giving you peace of mind.

CORONAVIRUS UPDATE

Unfortunately, due to the outbreak of coronavirus (COVID-19), some providers have decided to temporarily stop offering credit cards through Compare the Market. As a result, we'll only be able to show you credit cards from providers still available, meaning you may see a reduced number of cards on our panel.
 
We understand that the outbreak of coronavirus (COVID-19) has caused financial difficulty for some of you. If you have a credit card and you’re worried about making repayments due to coronavirus, we’re here to help you understand the options available.

Find out more

What are credit cards for bad credit?

A credit builder credit card, sometimes known as a bad-credit credit card, is a type of credit card available to people who might not get accepted for standard cards. These cards can  help you get credit  and, as long as you meet the repayments each month, help to prove that you can  manage money in a responsible way. If your credit score is low, then a credit building card can be a good way of building it up. 

How do bad-credit credit cards work?

As with all credit cards, a credit builder card will have a maximum spend limit. However, the limit on credit cards for poor credit is typically lower than most other credit cards – from around £100 to £1,200.  
 
It’s also very important you understand the APR (annual percentage rate). A credit card’s APR shows you how much interest you’d be charged, over the course of a year, for borrowing on credit if you don’t pay the outstanding balance back in full each month.   
 
Credit building cards often come with higher interest rates, so it’ll cost you more money than other types of credit card (in terms of interest) if you don’t pay off your balance each month. This reflects the greater risk the provider is taking on by lending money to someone with a poor credit history.  As with any credit card, it’s  really important to pay off what you owe on the card in full, each month.  Depending on the terms and conditions set out in your card agreement, your credit limit could be increased as you prove that you can spend more responsibly. But this depends on many factors – including the terms you agreed to when you applied for the credit card.

What’s a credit score and why is it so important?

A  credit score   is a tool typically used by a lender to work out whether you qualify for a particular credit card, loan or mortgage. A  higher score means you're more likely to be accepted for credit.  A lender will also consider your credit report (or history), detailing all the credit you’ve had, or have applied for in the past. Read about some of the steps you can take to   improve your credit rating. 

What is considered a bad credit score?

It’s important to know if you have a bad credit score, so that you can take steps to improve it and avoid the problem worsening. However, it can be slightly confusing to know if your credit score is bad or not, as different credit rating agencies (CRAs) use different scales for scoring. 
 
Experian, TransUnion and Equifax are the three largest CRAs in the UK. They each have a different scoring system, so a score of 700 with one could mean something very different with another. Here’s a breakdown of they each compare their scores.

Experian
Grade Score
Excellent 961-999
Good 881-960
Fair 721-880
Poor >720

 

Equifax
Grade Score
Excellent 800-850
Very good 740-799
Good 670-739
Fair 580-669
Poor >580

 

TransUnion
Grade Score
Excellent 628-710
Good 604-627
Fair 566-603
Poor 551-565
Very poor >550

These credit score ratings are accurate at the time of publishing on 17 September 2020.

What are the pros and cons of a credit building card? 

As they tend to have a low credit limit, a credit building card can be a good way of reversing your bad credit history. The low credit limit  could prevent you from racking up thousands of pounds' worth of debt over a short period of time. 
  
You might view a low credit limit as a drawback. But if you make all your repayments on time and don’t exceed your credit limit, your credit rating should improve over time.  
  
Don’t forget, paying with any kind of credit card, including a credit building card, gives you extra consumer protection for anything you buy that costs between £100 and £30,000. See more on credit card purchase protection.
 
One of the disadvantages of credit building cards is that they tend to carry a higher interest rate – between around 29% to 60%. That can make them expensive to use if you don’t pay the balance back in full every month. And don’t forget there’s always a risk involved in taking out any kind of credit. 
 
You should also look out for an annual fee. While some credit cards won’t charge an annual fee, others do, and you should consider it when comparing cards. Don’t immediately discount those which charge an annual fee though, as you may find the other benefits, such as a higher credit limit or lower interest rate, may outweigh the cost.

Who are credit building cards good for? 

To apply for a credit card, you must be a UK resident and at least 18 years old. Credit building cards are aimed at people who want to improve their credit score, or for people who aren’t eligible for many other cards. People they’re aimed at include those with: 

  • past debt problems 
  • County Court Judgements against them 
  • a history of bankruptcy 
  • a record of unpaid bills 
  • no history of borrowing 
  • no entry on the electoral register 

What else should I look for when choosing a credit building card?  

When comparing credit building card providers, you might want to ask yourself: 

  • Does the credit lender run a ‘soft check’ before I apply?  A soft check is when a person or company checks your credit report as a background check. Each time you apply for credit it’ll show up in your credit history. A soft check won't affect your credit score or report in any way, but it will help you know if you’re likely to be accepted for a card, without fully applying. If the lender runs a hard check, this will show up on your credit record. To minimise potential problems, you could see what credit cards you’re likely to be accepted for with our credit card eligibility checker
  • Can I manage my credit card account online or through an app?  Some providers will notify you via a text or other alert when a payment needs to be made, or a new statement can be seen – both of which can help you to keep on top of your finances. 
  • Can I transfer an outstanding balance? Some credit building cards will allow you to do this. 
  • What fees and charges might I have to pay? Check what the fees may be for late payments, for going over your credit limit or using your card abroad, for example. You should also check for any annual fees for taking out a credit card. Not all providers charge an annual fee, but some do, so you should keep an eye out for them when comparing.
  • Does the card offer any benefits? Some cards may promise a reduction in interest rates if you make all your payments on time and stay inside your credit limit in the first year. But these cards may have a higher rate of interest to start with. Other cards, for example the Tesco Bank Foundation Clubcard Credit Card, may give you points. 

Make sure you check any eligibility requirements, too. Some credit building cards rule out potential borrowers on specific grounds. For example, if you’ve missed more than three payments on another credit product in the last six months. 

How to get a credit card with bad credit?

If you currently have a bad credit score, getting the right credit card can help you improve it over time. To help you have a better chance of being accepted, we’ve put together some helpful tips: 
 
Start by using an eligibility calculator before you apply
This will give you an idea of the likelihood of you being accepted without impacting your credit score.

Only apply for credit cards you’re likely to be eligible for 
Once you’ve found a suitable card, using our eligibility calculator, you can make your application. During your application, you’ll likely need to supply the following information:

  • Proof of ID 
  • Proof of address for the previous three years 
  • Recent bank statements 
  • Your salary details 
  • Your employer details

If you get rejected for a credit card, don’t immediately apply for another 
Applying for a credit card leaves a mark on your credit report which can impact your score. If you’re repeatedly rejected for credit in a short period, this will significantly lower your score further. Instead, take the time to reassess your options, and use our eligibility calculator to find another potential alternative that suits your financial situation.

Check my eligibility

Credit cards for unemployed people

If you’re unemployed, having no form of income will likely make it difficult to get a credit card. This is because most credit cards, even credit cards for those with bad credit, require a minimum level of income before they’ll be considered. To get a better idea of understanding your options, and to find out if there’s a credit card out there for you, your best bet is to start comparing credit cards and review the requirements for application. Because of your unemployed status, any cards you may be eligible for will likely charge higher fees, as providers seek to offset the risk as much as possible.

Frequently asked questions

How are credit cards for bad credit different to other credit cards?

The differences between credit cards for bad credit and other credit cards are features, rates and limits. Some common extras available with normal credit cards include rewards, gifts and cashback on purchases. With a credit card for those with bad credit, you’ll be unlikely to receive these sorts of features. 
 
With a bad-credit credit card, you tend to have a stricter credit limit, which means you won’t be able to borrow as much. You can always apply for a credit limit increase if your credit score rises and you prove to your lender that you are more financially responsible. 
 
You’ll also likely be charged higher interest rates with a bad-credit credit card. By improving your credit score and moving to one of the regular credit cards, you’ll typically be rewarded with lower rate, as lenders have more trust in your ability to repay what you owe.

How else can I improve my credit score?

If you’re having trouble with a poor credit score, there may be some quick and easy things you can do to improve it. Others take more time, but consider the following:

  • Check your credit report for any mistakes – simple errors on your credit report may be negatively impacting your score. Correcting these could improve it.
  • Register on the electoral roll – potential lenders like to see a proof of consistent address. 
    Consistently pay bills and other direct debits – proving that you’re able to reliably pay bills and other outstanding debts is a great way to improve your credit score. This will take time, but potential lenders will want to see that you can be financially responsible.
  • Consistently pay bills and other direct debits – proving that you’re able to reliably pay bills and other outstanding debts is a great way to improve your credit score. This will take time, but potential lenders will want to see that you can be financially responsible. 
  • Keep within the limits of any credit accounts – proving that you’re financially stable will reassure potential lenders. Staying within any credit limits is a good way of doing this. Ideally, staying below 25% of your limit is best, but the main thing is that you don’t live consistently at the limit.
  • Don’t apply for credit repeatedly – each application for credit will leave a mark on your credit report. Repeated rejections will significantly lower your score.

Find more advice on building your credit score. 

What APR will I get?

It depends. When credit card providers show a representative APR, the rules say this rate must be offered to at least 51% of people accepted for the card.   
 
The remaining 49% of successful applicants are more likely to be offered a higher interest rate. If you’re one of these people, the rate you’re offered will be based on how big a risk the credit card company consider you to be. 
 
Using an eligibility checker that doesn’t leave a record on your credit file can be a good way of seeing the rate you might be offered. Why not try AutoSergei's™ credit card eligibility checker now? It takes under an average of 1 minute**. 
 
**On average it can take less than 1 minute  to complete a credit card eligibility check through Compare the Market based on data in September 2020. 

What credit limit will I get?

Your credit limit is the maximum amount you’re able to borrow using your credit card. Your credit card limit will depend on several key things:

  • Your credit score and history 
  • Your salary and other income 
  • Any outstanding loans or debts 
  • General affordability – assessed based on your combined incomings and outgoings

Simply put, the more you earn, the higher your credit score, and the lower your existing debts, the higher your credit limit tends to be. These things prove to lenders that you can be trusted with a larger amount of credit and pay it back responsibly. 
 
To find out what your credit limit could be, you can use an eligibility checker, but the exact figure will be decided during your full application. 
 
If you successfully apply for credit and then your credit score improves, you may be able to apply for credit limit increases, as you’re proving that you are a reliable borrower. Meeting the minimum payments on your card, and staying within your credit limit consistently is a good way to do this.

Why might I be refused credit?

There are many reasons you could be refused credit, or be seen as a bad credit risk. It could be that  you’ve no history of credit, have never borrowed or even had an overdraft. In that situation, a lender will have a limited idea of whether or not you’d be a good risk, and whether you’d be able to pay back what you owe. Another factor could be that your employment status isn’t strong enough to get the credit card you’d like. 
 
Credit checks also highlight any problems you may have had in the past with paying back debt. To a potential lender, this might serve as a red flag and they may refuse to accept your application. Checks will also show whether you have any County Court Judgements (CCJs) against you, and whether you’ve ever been declared bankrupt, or if you’ve committed fraud. 
 
If you’ve been a victim of fraud in the past, this could also make getting credit difficult. 

Where can I check my credit report?

There are  three main credit reference agencies in the UK: Experian, Equifax and TransUnion (formerly Callcredit). These organisations  compile information about how you manage your money (assuming you’re over 18). However, it’s worth noting that  not all of them will hold exactly the same information about you. 
 
If you’ve been refused credit, you can ask why and find out which credit reference agency (CRA) was used.  You can also  check your credit report  to make sure it’s correct. You might find there’s a genuine error on your report. A refusal could be down to something simple like your address being wrong. 
 
You can check your credit report for free. The three main agencies allow you to do this online at Experian, ClearScore (Equifax) or Credit Karma (TransUnion), or you can write to them and ask for your report. If you want additional services like continual credit monitoring, you may be asked to pay an additional fee. Check out our guide to free credit checks. 
 
Remember too, that Compare the Market’s AutoSergei credit card eligibility checker allows you to see the cards you're most likely to be accepted for, without affecting your credit score. 

What if I have no credit record?

Young people or people who have never borrowed before can find themselves in a catch 22 situation. As they haven’t borrowed before, they won’t have a credit record. Without a credit record, providers may be unwilling to lend to them.  
 
A credit card with a low limit can be a good way to start building credit. If you’re considering this option, make sure you’re on the electoral register.  
 
You can use our AutoSergei eligibility checker to see the cards you’re most likely to be accepted for, before you apply. This helps you avoid making multiple applications that could make you look desperate for credit. Ideally, you should pay back what you spend in full every month and make all payments on time. Over time, this can help you build a good credit record. 
 
A mobile phone contract with regular bills that you always pay off may count favourably towards your credit record. See more on how to build your credit score. 

Could using a credit card make my credit score worse?

Using a credit card could make your credit score worse, if you’re not careful. 

Late and missed repayments will damage your credit score. And just because you have a credit card limit, it doesn’t mean you should spend up to it. Credit ‘utilisation’ – how much of your credit limit you’ve used – is one of the factors that affects your credit score.  
 
If your credit utilisation rate is high, providers may worry that you’re facing financial difficulties. See more about what a credit utilisation rate is and why keeping it low is important.

Where can I compare credit builder cards?

We’ve teamed up with  Runpath Regulated Services Limited  to show the key features of each of the credit-building cards you can compare with us, helping you to choose the card that’s right for you. Don’t forget, with AutoSergei, you can see which cards you’re likely to be accepted for, without affecting your credit record. 

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