Ruth Jackson-Kirby
Rhiannon Philps
Having a bad credit score doesn’t necessarily stop you from taking out a credit card, but it does make the task more difficult.
There are a range of credit cards on the market, including specialist cards designed for people with less-than-perfect credit histories. These cards are likely to come with high interest rates and low credit limits, but they could be an option if you’re struggling to get accepted for other credit cards.
Find out more about what credit cards you could get with a bad credit score and whether they are the right option for you.
What is a bad credit score?
Your credit score is a figure used by lenders to decide whether you are likely to be a reliable borrower. It is compiled by credit reference agencies and is based on a range of factors, such as your payment history and how much outstanding debt you have.
Some factors that could cause you to have a bad credit score include:
- late or missed payments
- being in arrears on your household bills
- defaulting on a loan or other form of credit
- going over your overdraft or credit limit
- applying for credit too often
- having an individual voluntary arrangement (IVA), a county court judgment (CCJ), or going bankrupt
- being financially linked to people with poor credit histories
You could also have a low credit score if you haven’t built up much of a credit history, if you’re young or you’ve recently moved to the UK, for example.
There are three credit reference agencies in the UK: Experian, Equifax and TransUnion. They each have different scoring systems, so different numbers represent good and bad credit scores with each.
- Experian score from 0 to 999, with a poor score defined as 720 or anything under.
- Equifax score from 0 to 1,000, with a score of 438 or less regarded as poor.
- TransUnion scores range from 0 to 710, with a score of 565 or under seen as poor.
You can check your credit score for free with any of the credit reference agencies.
Can you get a credit card with bad credit?
It may be possible to get a credit card with bad credit, but it will depend on your individual credit history and overall financial situation.
But even if you can get a credit card with bad credit, you should first consider whether it’s a good idea to get one.
In particular, if you think you may find it difficult to manage your repayments and risk building up unaffordable debt, a credit card may not be right for you.
However, if you’re confident that you would be able to make your repayments on time, you may want to research what credit cards you can get and which ones are most suitable for you.
If you have bad credit, you may not be eligible for certain, more standard credit cards. However, there are providers that offer specialist cards for people with bad credit that may be an option. Each provider will set its own eligibility criteria so, just because you’re not eligible for one card, doesn’t automatically mean you won’t be approved for another card.
If you have a poor credit score or you haven’t got much of a credit history, you may want to consider a credit builder card. These could be an option if you want a credit card but don’t qualify for a standard card.
» MORE: What is a credit builder card?
Bear in mind that, if you have a bad or limited credit history, any credit card that you may be eligible for is more likely to:
- have a higher interest rate than a standard card for someone with a better credit score
- have a lowercredit limit than other credit cards
- come without some of the benefits that may be offered by other cards, such as 0% interest periods, cashback and reward schemes
How to get a credit card if you have bad credit
If you want a credit card but don’t need it immediately, it may be worth delaying your application for a few months, so you can try to improve your credit score. Having a better credit score could help you to qualify for a wider range of credit cards, potentially with interest rates and features that make them better suited to you overall.
However, you can still see if you can get a credit card with a less-than-perfect credit history. But before you start applying for any cards, you should first check whether you are eligible for any deals.
Because applying for a credit card involves a hard credit check, which leaves a mark on your credit history, you should limit the number of applications you make as lots of applications in a short space of time could affect your score further. You should only apply for cards if you’re confident that you’ll be approved.
To help with this, you can check your eligibility for credit cards before formally applying. Using an eligibility checker will only involve a soft search on your credit history, which won’t affect your score. They can show you which credit cards you qualify for, so you’re less likely to apply for an unsuitable card and get your application declined.
How to manage your credit card
If you have a credit card, it’s important that you manage it responsibly. Using a credit card can help you to build up your credit score, but only if you make payments on time, stay within your credit limit, and don’t build up a significant amount of debt.
You would also need to manage your other credit commitments effectively to see any improvement in your credit score.
If your wider financial situation allows, you might want to aim to pay off your balance in full each month to avoid paying any interest at all (although if you have other debts or financial obligations, you should consider the priority in which these should be paid). Making sure you only use your card to spend what you can afford can help you to stay on top of your repayments.
This can also have a positive effect on your credit score as it shows you can manage your credit responsibly.
Try not to use your credit card to withdraw cash as this can involve expensive fees and have a negative impact on your credit score.
Over time, if you manage to build up your credit history, you may be able to apply for more competitive credit card deals in the future. For example, you may qualify for cards with lower interest rates, or even cards with limited 0% interest periods.
If, however, you miss payments and build up a significant amount of debt on your card, not only will the provider be likely to charge penalty fees, your credit score could drop as well.
What can I do if I don’t qualify for a credit card?
If you are rejected for one credit card, don’t immediately apply for another one. Making lots of credit applications in a short space of time can affect your credit score and damage your chances of being approved.
Instead, take a look at your credit report – you can check it for free with Experian, Equifax or TransUnion.
You can then take steps to try to improve your credit score including registering to vote (this helps in verifying your address) and making sure there are no mistakes on your report. Read our guide to improving your credit score to find out more.
It can take a few months for your credit score to improve but this will depend on your individual situation, and there are no guarantees it will.
Ideally, you would wait for your credit score to improve before applying for credit. However, if you need access to credit right now and a credit card isn’t an option, you may want to consider an alternative. For example, if you have a poor or limited credit history, you may be able to take out a credit builder loan. However, these are only available from certain providers that will set their own eligibility criteria and they can prove an expensive way to build up your credit score.
You may also think about a loan from a credit union or applying for a specialist bad credit loan, but bear in mind these could come with high interest rates.
If you’re thinking of applying for a loan, make sure you can afford the repayments and don’t borrow more than you need to.
You can check your eligibility for a bad credit loan before applying, to see what loans and interest rates you could qualify for.
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