How do I get a credit card if I have a low credit rating?

The world of credit and credit scores can be a bewildering one. It might be tempting to stick your head in the sand and never attempt to understand it but that’s probably not a good idea. In fact it’s probably not even possible in today’s world.

Whether you’re buying or renting a house, taking out a mobile phone contract, or applying for a credit card, your credit score is important. That’s why it’s also important to understand what you score actually is, what it means, and whether you’ll be able to get a credit card as you stand.

What is a credit score?

At its simplest, a credit score is a measure of how credit worthy you are deemed to be. Or, in other words, a quick way of a lender deciding whether they should lend to you or not.

It’s built up over your life and takes account of everything that’s happened in your financial history. What you’ve applied for, whether you paid it on time. Who else you’ve borrowed money with in the past and whether you’ve had any county court judgements against you – to name just a few.

What is a good credit score?

Now wouldn’t it be easy if there was a simple score of between 1 and 10? We’re sorry, there isn’t.

To start with, there isn’t just one credit rating agency in the UK, there are three. To make things more complicated they don’t score things in the same way either. As different lenders use different agencies, that means it might be worth checking your score at more than one of the agencies yourself.

Experian

The Experian Credit Score runs from 0-999. It gives you an indication of how a lender would see you based on the information contained in your credit history.  The higher your score, the greater chance you have of getting credit deals as you can see below.

Equifax

At Equifax, a credit score is a three-digit number, typically between 300 and 850, though most fall between 300 and 500. Again, this is designed to represent your credit risk, or the likelihood you will pay your bills on time. It’s calculated by Equifax based on their methods using the content of your consumer file.

  • 0 to 278 is very poor and represents very significant risk to lenders
  • 279 to 366 is poor and represents significant risk to lenders
  • 367 to 419 is fair and represents some risk to lenders
  • 420 to 466 is good and lenders will be more inclined to grant credit
  • 467 and above is excellent and lenders will be more inclined to grant credit

Callcredit

Callcredit are different again. Their scores run the full range of 0-1000, bad to good - the average is 750.

How can I improve my credit score?

That’s a good question and one that we’ve answered for you here.

Can I still get a card if my credit score isn’t great?

That depends... For a start, lenders have different ideas as to what score is acceptable to them – so what is good for one lender may not be good for others.

It also depends on how poor your score is. It will be much harder if your score is very poor for example– or if you’re just starting out and don’t have a score at all.

Don’t despair though. There is a credit card designed to help people with low or no credit score(s). Appropriately named ‘credit builder cards’ or something similar, these cards are specifically designed for people with low credit scores.

What should I look out for with credit builder cards?

You should be aware that credit builder cards typically start out with low credit limits. Some lenders will increase it over time if you prove that you’re using the card responsibly – staying within your limit and paying off at least the minimum balance on time each month.

The cards also carry a much higher rate of interest than other types of credit card. It’s therefore a really good idea to repay as much of the balance as you can each month. If you can repay all of it, great – you’ll pay no interest at all.

Using a credit builder card responsibly will, over time, build or repair your credit score. It doesn’t happen overnight though, think of it as first steps on the way to a better score.

How can I compare credit builder cards?

To compare all types of credit cards you can use our credit card comparison service. We helpfully list the cards in various groups – one of which is credit builder cards. This means it’s really easy and straightforward to see what cards are out there.

Try it today and find a credit card that’s just right for you.

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