What is a Credit card for bad credit?
Credit cards for bad credit are specifically designed for people who want to improve their credit score – which can be helpful if you want to get a new loan, credit card or a mortgage.
It’s not uncommon for people to be denied loans and other credit because of a poor credit score. Luckily, a bad credit score can be repaired with good financial management — and there are options available to build to a good credit score.
A credit card for bad credit can offer a way of building your credit score over time. These cards often come with lower credit limits and higher interest rates (due to the increased risk the bank is taking in lending) — but these can change over time with good financial practice.
Using your credit card correctly could help to improve your credit report. This means making sure you’re not missing payments and not going over your agreed credit limit. If you manage your credit card well, over time, your credit score could improve.
If you’re looking to get started on your journey to good credit, we’ll explain how a Vanquis Credit card can help with building your credit score.
What is bad credit?
‘Bad credit’ is a term often used to describe a low credit score.
A low credit score is regularly associated with borrowers that frequently miss or make late repayments on their credit card, loans or other borrowing, and regularly exceed their credit card’s credit limit.
This may also include people who have defaulted on credit agreements altogether — which means they’ve broken their credit agreement.
In some cases, you may have been through bankruptcy, had a County Court Judgement (CCJ) or not have any experience with credit — all of which can make it more difficult to get accepted for a loan or credit card.
Fortunately, you can always grow your credit score — even when your score is low. Credit cards for bad credit are a way to help get things back on track.
A bad or poor credit score
Your credit rating is based on several factors, including but not limited to:
- Your current and previous credit history
- Any public information — like bankruptcies and Electoral Roll Register details
- The status of your existing credit and how well you’re managing it
Each lender has a different set of requirements when assessing potential customers for a credit card or loan.
There isn’t a specific credit score lenders use to make decisions on approval. This means you may be eligible for one credit card, but not a different one from another lender.
Lenders may also check the information held on your credit file at one or all of the three main credit reference agencies – Equifax, Experian, and TransUnion.
Reasons you could have bad credit
There are several reasons why you could have bad credit, including:
- Breaking your credit agreement – If you’ve missed any payments or gone over your credit limit, you may be breaching the terms of your credit agreement, which will usually be noted on your credit file.
- Getting into financial difficulty – Each repayment you miss can be noted on your credit file. Missing multiple repayments can cause your credit score to quickly drop — particularly if you miss many payments consecutively.
- Being close to your credit limit – If you are seen to always be nearing your credit limit, it can impact your score. It can be a good idea to use your card sensibly and make your payments on time.
- Having no credit history – If you’ve never taken on any form of credit before, lenders and credit reference agencies have no way of knowing how you use credit and pay it back — even if you’re reliable with money. This means you’ll be likely to have a lower credit score.
- Having too many credit searches – Applying for credit too many times can leave many hard inquiries on your credit file. Too many of these searches in a short space of time can lower your credit score.
- Public Information – If you have recently had any County Court Judgements (CCJs) or have filed for Bankruptcy in the last 6 years, this will often harm your ability to get credit.
If any of the above applies to you, Credit cards for bad credit could be an option to help improve your credit rating.
Why you should get a credit card for bad credit
Even if you find you have a poor credit file, there are still many options available when looking for a credit card.
A credit card designed for those with bad credit works in the same way as a standard credit card, but there are some changes. For example, credit limits are typically lower and come with a higher rate of interest.
Although the APR interest rate may be higher on these cards, making your payments on time will show that you are able to manage a credit agreement — often improving your credit score over time.
Here are some of the key points to consider when applying for and using a credit card for bad credit, as well as some things to be aware of:
- You can use a card to help build your credit score.
- Any purchases made with the credit card are protected, just like a standard Credit card.
- You still may be eligible for these cards if you have CCJs or have previously declared bankruptcy.
- If you are unemployed or not on the electoral roll at your current address, applying for a credit card could be more challenging.
How to get a Credit card with bad credit
You can apply for a credit card if you have bad credit — but you should make sure it’s the right card for your circumstances.
There are many different types of credit cards available, each with different uses. These can include 0% balance transfer cards, interest-free purchase cards, and even cards with cashback.
However, these cards are usually only available to people with good or excellent credit scores. If you want to be considered for these cards in the future, it might help to look at improving your credit score. This is where a credit card for people with a bad credit score could help.
The Vanquis Credit Builder Credit card could help boost a bad credit score by offering a card with a lower credit limit and a higher interest rate, to help get things started.
Some things to keep in mind when applying for a card with bad credit:
- Many lenders give you the option of an initial soft eligibility check. This can help you work out if you will be accepted without a hard credit search being left on your credit file.
- An eligibility check gives you an idea of whether you’ll be accepted for credit — but it’s not always guaranteed.
- Additional fraud, identity and affordability checks often need to be carried out. This means cross-checking information in your application against your credit report.
- If you decide to carry on with the full application, firms will perform a full credit check that will be noted on your credit file, so be careful when selecting the best credit cards for you.
Applying for a credit card for bad credit
Firstly, if you can, check your credit score. This can give you an idea of your current situation and highlight any problems with your credit report or mistakes you may want to fix.
> Find out more about your credit score
When it's time for you to choose a credit card, see if you can do a soft-search eligibility check before making an application in full. This will usually tell you if you are likely to be accepted but without affecting your credit score.
If you’re happy with the credit limits and APR offered after the eligibility check, fill in the form and let your bank handle the rest. They’ll perform a review of your finances and if you’re accepted will send you your card and PIN in the post.
Applying with Vanquis
Step 1
Use our Eligibility Checker to make sure our card meets your needs.
Representative 37.9% APR (variable)
Step 2
We'll show your offer with all the information needed to help you decide.
If you're happy, complete and submit your application.
Step 3
Next, wait for your card and PIN in the post.
Step 4
Download the Vanquis Bank app, use the card details provided to sign in and start your credit journey.
Why choose Vanquis?
Vanquis Bank — part of the Vanquis Banking Group — has been providing bespoke credit solutions to its customers and helping people handle their finances for over 140 years.
Our thorough “soft” eligibility checks help to provide confidence that customers will only be accepted for a credit card if they can make the repayments and are suited to the APRs issued — protecting you and others from mounting interest.
We work hard to make sure that all our credit cards are easy to apply for and simple to manage. Don’t want to take our word for it? Check out our Trustpilot reviews to read what our customers say.
We’ve helped over 5 million people on their journey to better credit. Why not join them and apply online today?
FAQs
Can I get a Credit card with bad credit?
Yes. You can apply for a credit card with bad credit, but you should make sure it’s the right card for your circumstances. While there’s no guarantee of being accepted, doing a soft-search eligibility check can be a good place to start.
Although there are many different types of credit cards available, each with different uses, many of them are only available to people with good or excellent scores.
If you want to access these types of cards in the future, you may wish to look at improving your credit score. This is where a credit builder card or a card for bad credit could help.
Can I apply for a Credit card if I have no credit history?
If you have no credit history, you’re essentially ‘invisible’ to lenders and credit referencing agencies. This means they have no way of knowing how you manage your money or how you handle credit.
If you want to take out a credit card, you may need to apply for a credit card for bad credit or a credit builder card – this can then be used to help build up your credit score if you manage the card properly and make your monthly payments on time.
If you have no credit history, using credit correctly might see your score improve more quickly than if you have a bad credit history.
Will my eligibility be guaranteed with a Credit card check?
While it’s unlikely you’ll find a company willing to offer a guaranteed approval, many lenders give you the option of an initial eligibility check. This might help you work out your chances of acceptance, without any negative impact being left on your credit history.
Representative 30.9% APR (variable)
To build your credit rating and be considered for credit limit increases, use your card sensibly, stay within your credit limit and make your monthly minimum payment on time. Not doing so could harm your credit rating and make obtaining credit more difficult.
