Monday Myth-Buster: Does bad credit mean I’ll never be accepted?
When you have a poor credit history, it’s easy to feel bogged down by the thought that you’ll never be able to apply for credit again.
But, while it can seem tough, it’s perfectly possible to turn your credit history around. And, there may still be options available to you if you need to borrow with a damaged credit history.
Focus on identifying the damage
First things first, it’s important to identify where you may have gone wrong with your borrowing in the past and start putting a plan in place as to how you can repair the damage.
To do this, it’s a good idea to create an account with ClearScore or Noddle if you haven’t done so already. Both of these services are free to use, and they let you check your credit history as often as you like. From here, you should be able to see the lines of credit you have open and how you’ve managed them, including any payments you may have missed in the past and any CCJs you might have.
If you notice anything on here that isn’t right, or you think there may be mistakes, it’s a good idea to speak to the lender in question. Most lenders will have a procedure in place to fix errors and take them off your credit history.
In our last Monday Myth-Buster, we explored whether bad credit lasts forever. And, it turns out - in the vast majority of cases - the damage will be there for around six years. So, keep in mind that lenders won’t be able to see a missed payment or CCJ forever.
Start your journey on the road to recovery
To start patching up the damage, a credit builder credit card could be a good way to prove to future lenders that you are now a reliable borrower. This type of credit card is usually available to people who have had difficulties with borrowing in the past, but it may have a lower spending limit and higher interest rate than a standard credit card.
Providing you make at least the minimum repayment on time each month, your credit history will slowly start to improve. We’d always recommend you pay as much as you can each month, as clearing the balance in full when your statement is due means you won’t have to pay a penny in interest. It also means that there’s less chance your balance will grow and you’ll struggle to afford the repayments further down the line.
The Ocean Credit Card (39.9% APR representative) could help you start to rebuild a solid credit history, and you can now check whether you’ll be accepted before you apply with our QuickCheck feature.
Know if you're accepted before you apply with Ocean's Credit Card QuickCheck
Get credit - up to £1,500 - QuickCheck won't affect your credit rating - Get a response in 60 seconds.
39.9% APR Representative (variable) Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender
Making a credit card payment late can damage your credit history further, so you should set up a Direct Debit with your credit card provider to pay as much of the balance as you can automatically. You can choose to make the minimum repayment or clear the balance in full every month. This means you can rest easy in the knowledge that you won’t miss your payment date. But, bear in mind that if you don’t have the cash in your bank account, the payment probably won’t go through.
Remember, if you don’t feel quite ready to take on more credit just yet, it’s best to hold off borrowing for now. If you worry that you may spend too much, try to restrict yourself to one small purchase a month on a credit card, and then set up a Direct Debit to clear the balance every month. Your credit history will slowly start to improve by doing this, too.
Disclaimer: All information and links are correct at the time of publishing.