Comparing Credit Cards when you have a bad credit score

It can stop you from getting a loan, hinder your chances of taking out a mortgage or prevent you from accessing the best rates on a balance transfer card. There are no two ways about it – having a poor credit rating can seriously limit your options.

 

That said, don’t despair. There are things that you can do which will, over time, help build your score back up. You might think it's strange, but it’s true – getting a credit card and using it responsibly will help.

Why would my credit score be poor?

It’s not just people who have missed credit card payments in the past who could be assessed as being a poor credit risk – though that won’t help. County court judgements and bankruptcy would be obvious factors that could hurt. Then there are some less obvious things. Not being on the electoral register, not having had a credit card or an overdraft before or even working part-time can count against you when you apply.

What can I do about it?

While there is no quick fix, there are things you can do to build it up. First off, get a credit score report and double check that there are no mistakes that could be lowering your score.

However, if the facts don’t lie, the more you can do to show that you’re a responsible borrower, the more likely you are to start improving your credit rating. Doing so reduces your chances of being refused for credit cards, loans or mortgages.

One way of doing this is to take out a credit builder card. This is a special kind of credit card for people with bad credit ratings. They can be a great first rung on the ladder to building (or rebuilding) your score.

Credit cards for poor credit rating

There’s nothing worse than needing credit and being turned down outright. Not only does it feel awful, it can damage your credit score further. Some call it a ‘rejection spiral’ because continually applying and being declined can all have an effect on your credit score.

Credit builder cards, also known as poor credit rating credit cards, are now offered by a number of banks, credit card companies and specialist providers.

Designed for those with a low credit rating, they give you access to all the good things credit cards provide – like flexible spending and greater protection should things go wrong with goods that you purchase. And they do this all while helping you build your credit rating at the same time.

Getting one of these cards could see you stepping off the rejection spiral, too. That’s because the providers of these types of card are more willing to accept people who have been declined credit from other sources.

How to use bad credit cards

Unfortunately, these cards normally come with low credit limits and high rates of interest so it’s a good idea to see them just as a way of building up your track record of better borrowing behaviour. That said, some providers will increase your limit over time when you show them you can use the card responsibly.

It’s best to use your card to pay for a few things each month and then pay the balance off in full and on time so you avoid paying interest.

Comparing bad-credit credit cards 

Although you should always pay off the balance in full every month, it’s still worth comparing all the different interest rates on offer, just in case.

That’s easy to do with our comparison service. Try it today and find a card that’s perfect for you.

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