Held back by a chequered credit history? You don't have to be. More card issuers are getting into the specialist lending market - so you may have more choice than you thought.
Approval for any credit card depends on your status. The representative APRs shown represent 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. Most of the data in Finder's comparison tables is provided by Moneyfacts.
What is a ‘bad credit’ credit card?
These types of cards are aimed at people with less than perfect credit scores or credit history.
It used to be tough to get approved for a credit card with a poor credit history, but these days 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.
What is my credit score?
Your credit score is simply an indicative number calculated from lots of data-points in your credit history. It’s a useful gauge for how strong a position you’re in when it comes to applying for credit. There’s 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: 0–1,000
TransUnion (formerly Callcredit): 0–710
Depending on your score, you’re said to have excellent, very good, 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
0–438 439–530 531–670 671–810 811–1,000
Poor Fair Good Very good Excellent
TransUnion
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?
There are a number of financial options to consider if you have a bad credit score, some of which don’t involve a credit card 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 they 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.
Debit cards. A good way to avoid debt is to steer away from credit and only spend what you have, by using a debit card to pay for your purchases. Although using a debit card is unlikely to affect your credit rating, a current account with sensible, regular debits (payments) going out is a good sign to a potential lender. Banks sometimes offer cash incentives to switch your current account (which you get your debit card with), so if you are thinking a debit card could be a good option for you, make sure you compare the best banking deals.
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 onto 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 to borrow larger amounts of money to help pay 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. Again, the interest rate can be higher but the rate is often fixed, making it easier to budget. If you keep up with your loan repayments, this can help you to rebuild your creditworthiness.
Guarantor loans. With a guarantor loan, a friend or family member 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.
Bad credit credit cards can enable you to build a credit rating but, as interest rates can be high, it’s important to pay off your balance in full every month.”
Ultimately, a bad credit rating can significantly impact your lifestyle, making it difficult to get a car loan, 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 further down the road.
Make sure you compare credit cards for people with a 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 and could actually harm your credit score.
There are steps you can take to improve your credit rating and manage your finances so that you can live free of debt. A good place to start is by requesting a copy of your credit report and identifying the negative listings on your file.
It’s also worth using an eligibility checker before you apply for a credit card or loan as this will show you the deals you’re most likely to get accepted for. And it won’t affect your credit score.
If you have a low credit score or a poor credit history, the good news is there are options to help get you back up and running again.
There are several specialist financial products available to enable you to take control of your finances and improve your credit score. With careful use, this could help you unlock better financial deals in the future.
Frequently asked questions
With poor-credit credit cards, you’ll likely have a lower credit limit and a higher interest rate compared to other credit cards. Your card is also unlikely to have features such as cashback and rewards.
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. Most of the data in Finder's comparison tables has the source: Moneyfacts Group PLC. In other cases, Finder has sourced data directly from providers.
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To make sure you get accurate and helpful information, this guide has been reviewed by Rachel Wait, a member of Finder's Editorial Review Board.
Chris Lilly is Head of publishing at finder.com. He's a specialist in personal finance, from day-to-day banking to investing to borrowing, and is passionate about helping UK consumers make informed decisions about their money. In his spare time Chris likes forcing his kids to exercise more. See full bio
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Chris has written 612 Finder guides across topics including:
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