If managed responsibly (e.g. repaid on time and spending kept within agreed limits)a credit card could help to improve your bad credit over time, but it’s important to make sure that it's the right choice for you and your situation first.
Factors to consider before applying
Whether you should apply for a credit card depends on your own circumstances, but you should consider these five questions before you go any further.
1. Do you need a credit card?
Ideally, credit cards should only be taken out for short-term borrowing to pay for things like a broken boiler or car repairs, for example. Or to help rebuild your credit rating.
Consider your reason and whether you need to take out a credit card, or if the purchase you want to make is non-essential and could wait until another time when you have the funds available.
If you want to take out a card to rebuild your credit, ensure you’re in a position to stay on top of your repayments, as not doing so will harm your score further.
2. What is your credit history like?
If you haven’t done so already – you should check your credit report. This is one of the things lenders look at when you apply for credit as it paints a picture of the type of borrower you are. You can do this for free with the three main credit reference agencies in the UK: Experian, Equifax and TransUnion. You can also check your Equifax credit report for free (for life) with our member-only platform, CredAbility.
It’s worth knowing what lenders will see as any negative markers, like late or missed payments, could indicate that you are high risk, which may put some (but not all) lenders off.
If you have bad credit you may want to work on improving your credit score before you apply. Or consider a lender who provides finance for those with less-than-perfect credit.
3. Can you definitely afford the repayments on a credit card?
If you’ve fallen behind with your debt repayments already, applying for additional credit could put you under more financial strain. So, it’s important to think about your options carefully to make sure you only apply for a credit card if you can afford the repayments (paying off the balance in full each month is ideal, but you should be sure you can make at least the minimum amount).
Remember, if you miss any payments, pay late, or less than the minimum amount, it will show on your credit report for six years and late charges may apply. Negative markers can also reduce your credit score, which may affect your ability to get finance in the future.
4. Have you made any recent credit applications?
If lenders can see multiple applications within a short space of time, you might appear desperate to borrow, so lenders could be more likely to reject your application. However, each lender follows their own criteria, meaning some may place less weight on certain factors than others.
5. Are you eligible for a credit card?
A good way of starting your search is to check your eligibility before you apply. Remember, each time you apply for a credit card, your credit history will be marked – regardless of whether you’re accepted or rejected.
It’s a good idea to use a soft search tool to help match you to products that you’re most suited to - without leaving a footprint on your credit file. This is worth doing, even if you don’t have a bad credit history. It means that you can apply with more confidence for the credit cards that you are eligible for, with less chance of being rejected.
Our soft search eligibility checker is called QuickCheck, and will tell you if you’re pre-approved for the Ocean credit card without harming your score at all.
What credit card can I get with bad credit?
Whilst your options may be limited, you may still be able to get a credit card with bad credit. Each lender uses their own criteria, and some have different thresholds than others. Though there are no guarantees, of course.
If you’re confident that you can make at least the minimum monthly repayments without fail, and stay within your agreed limit, a credit card could be one practical way of repairing your credit history over time. We look at some of the options available if you have bad credit.
Your eligibility will depend on your individual circumstances and the lender’s criteria.
Bad credit credit cards
If you have bad credit, or no credit history you may want to look for lenders who offer credit cards for bad credit.
These work just like regular credit cards, but they’re specifically designed for people with poor credit, due to a damaged or thin credit history. So, they tend to come with broader eligibility thresholds. But, they also tend to have higher interest rates and lower credit limits.
If you always pay the balance in full, or the minimum payment on time and stay within your credit limit, then a credit card could help to gradually boost your credit score. In turn, this should improve your chances of approval - and help you gain access to lower interest rates in the future.
What’s the reason for my bad credit history?
Before even considering taking out a credit card, it makes sense to look at your credit report to identify areas you could improve on.
A bad credit history or low score could be caused by a few factors, such as:
- missed or late payments
- multiple credit applications made in a short space of time
- defaults and County Court Judgements (CCJs)
- relying too much on an overdraft or credit card
- having a high level of debt
- not having any credit
Read on for more information about what affects your credit history.
Quick fixes to improve your credit score
You can’t transform your credit score overnight (your credit history tracks the last 6 years), but there are things you can do now that will reap rewards in the future.
If you’ve got bad credit and the soft search tools show you’re likely to be turned down for finance, it might be worth putting your application on hold. If you’re in need of access to funds and struggling financially, there are also a number of charities that can help you.
Focusing on improving your credit score instead, should help to place you in a better position to get the deal you want in the future.
Here are 5 quick ways you can improve your credit score:
- add your name to household bills to build up a credit history
- register to vote so lenders can verify your identity
- set up direct debits so you never forget to make a payment
- use savings to reduce your debt
- join the Rental Exchange Initiative, so your rental payments appear on your credit report
Read on for more information on how to improve your credit score in one day.
Improve your credit rating with Ocean Finance
- Up to £1,500 credit limit
- Quickcheck won't impact your credit rating
- Check your eligibility in 60 seconds
Intelligent Lending Ltd (credit broker). Capital One is the exclusive lender.
What’s the reason for your bad credit history?
Before even considering taking out a credit card, it makes sense to look at your credit history to identify areas you could improve on.
A bad credit history could be caused by a few factors, such as:
- missed or late payments
- multiple credit applications made in a short space of time
- defaults and County Court Judgements (CCJs)
- relying too much on an overdraft
- having a high level of debt
- not having any credit
Read on for more information about what affects your credit history.
Quick fixes to improve your credit score
If you’ve got bad credit and the soft search tools show you’re likely to be turned down for finance, it might be worth holding making an application, and focus on improving your credit score instead. This should put you in a better position to get the deal you want in the future.
Here are 5 quick ways you can improve your credit score:
- add your name to bills to build up a credit history
- register to vote so lenders can verify your identity
- set up direct debits so you never forget to make a payment
- use savings to reduce your debt
- join the Rental Exchange Initiative, so your rental payments appear on your credit report
Read on for more information on how to improve your credit score in one day.
