Approval for any credit card will depend on your status. The APR shown represents the interest rate offered to most successful applicants. Depending on your personal circumstances the APR you're offered may be higher, or you may not be offered credit at all. Fees and rates are subject to change without notice. It's always wise to check the terms of any deal before you borrow.
Credit cards for applicants with bad credit
Held back by a chequered credit history? You don't have to be. More and more card issuers are getting into the specialist lending market – so you may have more choice than you thought.
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It used to be tough to get approved for a credit card with a poor credit history, but these days competing financial institutions are increasingly looking to different sectors of the market where they can offer specialist credit cards. The reality is that these cards have higher interest rates, lower credit limits and not much in the way of extra benefits. However, they’re easier to get approved for and are designed to help you improve your credit rating over time – therefore increasing your chances of approval for other credit products in the future. Here are some popular options for applicants with bad credit plus tips for getting your credit history back into shape.
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Table: sorted by representative APR, promoted deals first
What is my credit score?
Your credit score is based on metrics in your credit history and is a major factor in determining your success when it comes to applying for credit. There is no single standardised way of calculating credit scores, with credit rating bodies, banks and credit card companies using their own rating systems in assessing client credit ratings.
- Experian: 0–999
- Equifax: 0–700
- TransUnion (formerly Callcredit): 0–710
Depending on your score, you’re said to have excellent, good, fair, poor or very poor credit:
| Agency | Score | Rating |
|---|---|---|
| Experian | 0–560 561–720 721–880 881–960 961–999 |
Very poor Poor Fair Good Excellent |
| Equifax | 0–279 280–379 380–419 420–465 466–700 |
Very poor Poor Fair Good Excellent |
| TransUnion (formerly Callcredit) | 0–550 561–565 566–603 604–627 628–710 |
Very poor Poor Fair Good Excellent |
What financial products can I get with bad credit?
You have a number of options if you have bad credit, most of which don’t involve credit cards at all.
- Specialist credit cards for bad credit. A number of banks offer credit card options for people with a poor credit history. These cards typically have low credit limits, higher interest rates and few extra benefits but do allow individuals to improve their credit rating over time. It’s not recommended that you apply for one of these cards if your objective is to use it to tackle existing debt, as this can simply lead to greater debt. Work on clearing existing debts before applying for a card like this. Compare now.
- Debit cards. A good way to avoid debt is to steer away from credit and only spend what you have. Although using a debit card is unlikely to affect your credit rating, a current account with regular direct debits is a good sign to a potential lender.
- Prepaid cards. Prepaid cards are similar to debit cards in the sense that you’re spending only what you have. Unlike a debit or credit card though, you load funds on to the card before using it. These cards also don’t affect your credit rating and don’t charge interest, so they can be a good way to build up your budgeting skills. Most prepaid cards are either Visa or Mastercard, so you should be able to use them in the same places that you’d use your credit or debit card. Compare prepaid cards
- Bad credit personal loans. Personal loans are traditionally used when borrowing larger amounts of money for a significant purchase or to consolidate debt. There are some bad credit personal loans on the market that cater especially to people with poor credit ratings. These loans usually come with a fixed interest rate and if you repay responsibly, can be used to rebuild your creditworthiness.
- Guarantor loans. With a guarantor loan a second person agrees to step in and make repayments if you fail to do so. Lenders will be able to consider the second individual’s credit rating as well as your own.
- Payday loans. Payday or short term loans are a very expensive method of borrowing and should only be considered as a last resort to cover an unexpected cash shortfall. They’re not suitable for those in financial difficulties, they may not solve your money problems and they’re not a good idea for borrowing over longer periods or for sustained borrowing. Short term lenders are often willing to consider lending to those with less-than-perfect credit ratings and will normally lend a small amount for a short time initially, then may gradually increase the loan amounts and loan terms they offer. You should compare lenders before you apply.
Ultimately, a bad credit rating can significantly impact your lifestyle, making it difficult to get a car, a mortgage or other forms of credit. If you find yourself in such a position, don’t despair. Making the right choices from now on can lead to financial freedom down the road.
Make sure you compare credit cards for people with poor credit history before you make an application. You shouldn’t apply for every card and loan under the sun, because multiple applications for credit in a short space of time can ring alarm bells with potential lenders. You can also take steps to improve your credit rating and manage your finances so that you can live free of debt. You may opt to begin by requesting a copy of your credit report and identifying the negative listings on your file.
List of documents needed for credit card application
Bottom line
Don’t be down if you have a poor credit history as you have options to help you get you back up and running again.
There are several specialist financial products available to enable you to take control and build your credit score. Use our table above to compare your options. With careful use, this can help you unlock better financial deals in the future.
We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you.
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