As they say, Rome wasn’t built in a day. And neither is your credit rating.
Whether you’ve never borrowed before, or you’ve missed payments in the past, you’re likely to have a bad credit rating. And that can mean a ‘no’ when it comes to applying for credit.
It’s as disappointing as a sloppy Tiramisu. But don’t let it get you down too much – there are things you can do about it.
What can I do?
The key to being accepted, and to getting the best deals, is to build up your credit rating. But, just as Rome was laid brick by brick, it takes small steps to build or rebuild it – you can’t do it in a day!
As well as all the usual tricks to help give it a boost (read about them here), you could also look into a credit builder credit card (a mouthful, we know!).
What exactly is a credit builder credit card?
As the name suggests, these cards are designed to help you improve your credit rating.
By spending small amounts on them and making sure you pay it back (ideally in full, but at least the minimum repayment) on time every month, it can help to boost your rating over time.
We can’t stress enough just how important this is. It’s as important as roads were to the Romans!
Borrowing modestly, making your repayment on time and clearing your balance each month shows that you’re a responsible borrower, which reflects well on you in future credit applications.
Your credit rating isn’t going to suddenly go from poor to good, but be patient and you should start to see it improving.
These cards typically start you with a low credit limit so that you can keep tight control over your spending. However, your limit will be usually be reviewed a couple of times a year and may be increased if you show you can borrow responsibly and can afford it.
Of course, if you miss a payment, don’t meet your minimum repayment, or go over your agreed credit limit, not only will you be negatively impacting your credit rating, you could also be hit with additional charges.
But how do I get a credit builder credit card if I’ve been rejected for credit before?
Firstly, stop applying. If you keep being rejected, you’re likely to be damaging your credit rating as each application leaves a mark. If you have lots of marks in a short period, you look desperate for cash, so lenders could think you’re risky to lend to.
Instead, look for the cards that are specifically designed to boost your credit rating.
Even if you’ve been rejected in the past, it doesn’t necessarily mean you’ll be rejected again, because things can change, so it’s worth checking.
Check your eligibility first
Once you’ve found a credit card you like the look of, make sure it has an eligibility checker. This is different to making a full application, as it lets you see if you’ll be accepted before you apply. It should be pretty clear on the lenders’ website whether it’s an eligibility checker or not.
Using an eligibility checker will protect your credit rating as only you'll be able to see this search on your credit report.
If you get a yes, brilliant! You can go on and apply with confidence and start borrowing sensibly (remember to make sure you pay back what you borrow on time every month).