Credit Builder Card

It depends how you go on to use your card once accepted. If you’ve struggled to get credit before due to a low or limited credit score, a credit builder card could help improve your financial situation. 

By using the card responsibly—staying within your limit and paying on time—you can boost your credit score. Over time, this may help you qualify for better deals, like lower interest rates on other financial products. Not using your card responsibly could result in your score going down. 

Getting a credit card with no credit history can be challenging, but it’s not impossible. 

Specialist lenders, like Ocean Finance, offer credit builder cards designed for people with little-to-no credit history. Using the card sensibly—making small purchases and paying off your balance in full—can help you build a credit history over time. 

Using a credit builder card responsibly can help improve your credit score over time. This means: 

• Paying your bill on time, every month. 
• Keeping your balance low, ideally below 25% of your credit limit. 

Your credit score won’t improve overnight, but with consistent good habits, you could see progress within a few months. 

Building your credit score takes time, so try to be patient. 

If you’re managing your finances well—like paying bills on time and using credit responsibly—you could start to see improvements in a few months. Keep in mind that credit reference agencies update your records at different times, so changes won’t happen overnight. 

You can check your eligibility for a credit builder card without affecting your credit score. 

However, if you decide to apply, the lender will perform a hard credit check. Don’t worry—responsible card use, like paying on time and keeping within your limit, can help your score recover and improve over time. 

Yes, there are alternatives to credit builder cards. The right one for you will depend on what you’re trying to achieve. 

• Build credit – From adding yourself to the electoral roll, to keeping up with household bills, there are many steps you can take to improve your credit score without a credit card.
• Access funds – To access funds, you can apply for a loan. You may be able to borrow more with a secured loan, but be aware your home will be used as security. This means if you fall behind on your secured loan or mortgage repayments, your home may be at risk. Personal loans are not secured against your home, but monthly repayments tend to be higher.
• Consolidate debt – You can move either some or all your debt into one payment with a debt consolidation loan. This can reduce your monthly outgoings but be aware that you may be extending the term and increasing the amount you repay in total.

You’ll need a minimum income to qualify for any credit card, but this amount varies between lenders. 

If you have a lower income, some lenders may still consider your application. The minimum income requirement is there to ensure you can afford at least the minimum monthly repayments. 

Missing a payment could harm your credit score and may lead to late fees or interest charges.

To avoid this, consider setting up a Direct Debit for at least the minimum payment each month. If you’re struggling, contact your lender as soon as possible—they may be able to help. 

Yes, some credit builder cards allow for credit limit increases if you demonstrate responsible use, like making payments on time and staying within your limit. 

However, a higher credit limit can lead to higher debt if not managed carefully. Only accept an increase if you’re confident you can manage it responsibly. 

Credit builder cards are designed for people with bad or limited credit histories, so there’s no strict minimum credit score. 

Instead, lenders look at your overall financial situation, including your income and any recent issues like missed payments or defaults. 

Credit builder cards may come with fees, such as: 

• Interest if you don’t pay your balance in full. 
• Late payment fees if you miss a due date. 
• Overseas usage fees for spending abroad. 

Always check the terms and conditions to understand any potential costs. 

If your application is declined, don’t worry—there are steps you can take: 

• Check your credit report for errors and correct them.
• Use an eligibility checker to see your chances of approval before applying again. 
• Focus on building your credit score with other methods, like paying bills on time and reducing existing debts. 

Remember, applying multiple times in a short period can harm your credit score, so space out applications where possible.