How To Get a Credit Card With Bad Credit

‘Bad credit’ is a term used to describe people with a low credit score. What counts as a low credit score depends on which credit reference agency is being used – they all use different scoring systems.

A low score with Transunion is anything below 565 (out of a maximum score of 710). With Equifax it’s 438 or below (out of 1,000), and with Experian it’s 720 or below (the maximum score is 999).

You might have bad credit if you have failed to make payments on past credit agreements on time, or if you have fallen into arrears on household bills or your mortgage.

You’ll also be classed as having bad credit if you have County Court Judgments (CCJs) against your name, or if you’ve been made bankrupt.

Some people have ‘bad credit’ because they don’t have much experience of credit – normally because they are young – or because they are new to the UK (credit files don’t move country with you).

If you have bad credit, you are likely to be rejected for best buy and most mainstream credit cards. But some providers offer credit cards specifically for people with bad credit – these are usually called ‘bad credit credit cards’ or ‘credit builder credit cards’.

If you apply for one of these cards you are less likely to be rejected because of your credit history.

Bad credit credit cards tend to have a high APR and lower credit limit.

If you take out a credit card for bad credit, you can use it to improve your credit score. This means:

Warning: Credit cards for bad credit come with high APRs. It’s important to pay off your entire debt each month, otherwise high interest charges will add a significant amount to your debt.

If you have bad credit and apply for a standard credit card you’re likely to be rejected. This can further harm your credit score and make it even more difficult to be accepted for credit in the future.

You can use a credit card eligibility checker to see how likely it is you will be accepted for a certain card before applying. Checking your credit card eligibility can help you to avoid damaging your credit score with rejected applications.

It’s also a good idea to check your credit report. If you spot any incorrect information, you can raise a dispute and fix any errors.

If you decide to opt for a bad credit credit card, shop around and compare the different offers. Some cards offer 0% interest periods for purchases or balance transfers. These won’t be as long as those on mainstream credit cards, but they can still be useful to have. Some bad credit credit cards also offer cashback or rewards, which can be useful.

If your credit card application is rejected, don’t reapply for another card straight away.

Too many rejections on your credit report in a short amount of time can further damage your ability to borrow. In some cases, you might be better off using your overdraft or applying for a loan for people with bad credit. But make sure you do your research and calculate the costs.

Bear in mind that if you opt for a ‘homeowner loan’ or secured loan, your home could be at risk of repossession if you don’t repay the debt.