United Kingdom 17 May 2022

Getting Approved for a Credit Card (even with Poor Credit!)

Are you looking for a credit card with a simple approval process? Do you need a credit card despite a bad credit score and without checking your credit information? Read through our guide and find the right credit card for your needs!

How to apply for a credit card in the UK

Are you a UK resident thinking about obtaining a credit card? Look no further, we’ve put together all the information you need to get the green light on a new credit card.

What’s a credit card and how does it work?

Before applying for a credit card, it’s always best to do your research, or even better, let us do the leg work for you!. The first step? Understanding what a credit card is and how it works.

When you apply for a new credit card, your bank or lender will run a credit check. This check lets the lender see if you carry any risk as a borrower, this risk factor is calculated on a number of factors such as your age, employment status and income, and the number of accounts you currently hold. This data, known as your credit score, can affect your chances of being approved for a credit card and the interest rates that you’ll have to pay.

What are the general requirements and do I meet them?

While each lender will have its own acceptance criteria, here are some general requirements:

Your age: Generally speaking, you will need to be over 18 years old to apply
Your employment status: If you are currently employed, this will help your application (especially if you are on a full-time contract)
Your income: A lot of lenders will ask you for your annual income so they can access if you are able to make your credit card repayments
Your finances: If you have a history of debt, bankruptcy or other financial issues, this will be taken into account during the qualifying process
Your credit report: Your credit report (which details your credit score) will always be one of the key factors in obtaining a credit card as it gives an overview of how responsible you are as a borrower
If you’re applying for the first time: You may find that you are considered a high-risk borrower if you’re applying for your first credit card since you will have no proof that you have used credit responsibly in the past

What happens if my credit score is low or I don’t have one?

Don’t worry if you have a low credit score, whether it’s because of a bad borrowing experience in the past, or simply because you’ve never used credit before, there are lots of ways that you can improve your credit score or build it up from scratch.

How to build a credit score if you don’t have a credit history

If you want to give yourself the best chance to build your credit score and have your first credit card application approved, try these top tips:

Pay your bills on time: The best way you can boost your chance of getting your credit card application approved is by proving that you are a reliable borrower. Build up a solid history of bill repayments to show that you are financially responsible.
Have an active bank account: By having a current account, you can prove that you are reliable with your money. Having regular direct debits that you pay back on time will show lenders that you are more than capable of managing and repaying credit.
Have a regular income: Another way of proving that you are a good candidate for a credit card is to provide evidence that you have a regular income, and can therefore manage your repayments with ease.
Register to vote: This one may come as a surprise, but registering to vote can help your application. Signing up to the electoral roll shows proof of address, which is an important factor for your credit score (add your landline number for an even bigger boost).
Use a credit card to build your credit rating. Getting a credit card and managing it correctly is the best way to give your credit rating a boost. Check out the many credit cards available that are specifically designed to build credit.

How to boost a bad credit score

If you have a low credit score due to missed repayments, declaring bankruptcy or being financially tied to someone with bad credit, try these steps to rebuild your credit:

Check before you apply. Applying for credit cards that you aren’t eligible for can look bad on your credit score. Many banks now offer their own eligibility checkers which allow you to check that you’re eligible before applying to avoid black marks on your credit report.
If you are rejected, stop and wait. Don’t instantly fill out another application if yours is declined. Give it some time before applying again.
When you can, repay in full every month. Always repay at least the minimum every month, but one trick for amping up that credit score is to repay your full balance monthly.
Step away from the ATM. Try to avoid withdrawing cash with your credit card to improve your credit rating. As it’s an expensive way of taking out money, it may appear to lenders that you’re desperate enough for cash to pay an elevated fee, or that you don’t have another source of money.
Watch out for the APR. Some banks will offer a higher APR to borrowers with bad credit history. Always check the APR on your credit card.

Getting to know the lingo

Annual fee

This is the yearly charge some lenders will charge you for managing and maintaining your account. An annual fee is usually difficult to avoid if your credit card offers rewards, so it’s best to weigh up the rewards against the fee. If you pay off balances quickly and use your card enough to receive the rewards, then it’s probably worth it. Alternatively, if you use your credit card rarely, it may be best to skip the rewards and look for a credit card with no annual fee.

APR

The annual percentage rate (APR) is the interest rate charged on credit card balances, given as a standard yearly figure. Put another way, the APR is used to calculate how much (in interest charges) is added onto your statement each month that you don’t pay your balance in full by the due date.

Lenders use a number of factors to determine the APR on your credit card, including your credit score and history. Lenders will assign APRs based on how risky they think it is to lend you money, so the lower your credit score is, the higher your APR is likely to be. For context, the average APR for a borrower with good credit is around 15%, if the APR on your credit card is much higher than this, it could be a sign that your lender considers you a higher risk borrower.

Balance transfer

A balance transfer is the process of moving unpaid credit card debt from one lender to another. The new lender will essentially pay off the balance you owe to the previous lender and transfer the unpaid balance to your new credit card. You might wonder what the benefit of this is, I mean you still owe the same amount, right? While it’s not a magic fix, a balance transfer can be a good idea if your new lender offers a lower APR than the previous one, as it gives you the chance to pay off the balance during the introductory transfer rate period which usually lasts six to 18 months. The new lender usually charges you a one off fee for paying off your debt to your previous lender (generally 3 percent of the amount transferred). To put it simply, if you’re stuck paying a high APR on your credit card and you find a new credit card that offers a low APR or 0% balance transfers, a balance transfer could reduce the interest you’re paying and help you clear that outstanding balance quicker.

Credit history

Your credit history is an overview of your financial situation including how much debt you hold with credit card companies, home loans, auto loans, student loans, etc. and how reliable (or not!) you’ve been in the past when it comes to repaying your loans on time.

Credit limit

Your credit limit is the maximum amount of money you can spend on a credit card. If you go above this amount, you’ll usually be charged a fee. Don’t forget, continuously getting close to your credit limit could also hurt your credit score. While there isn’t a specific number, it’s best to avoid using more than 40% of your credit limit. If you regularly get close to your limit, you run the risk of being viewed as a high risk borrower.

Credit score

Your credit score is a calculation made by lenders to decide how likely you are to pay off your debts on time. Each bureau has their own formula for calculating your score, but the score should be between 300 and 850 (the higher the better). This, in turn, affects the APR that you’ll pay on your debt, the lower your credit score, the higher your APR.

Secured credit card

Secured credit cards are usually a good option for those with a bad credit history or no credit score. To be approved for a secured credit card, you usually need to put down collateral like a cash deposit. While they can be great for building or rebuilding your credit score, it’s important to compare a few options before you make a decision. Some lenders load secured credit cards with high fees, knowing that borrowers often have limited options for credit.

Variable interest rate If you have a variable interest rate on your credit card, this means that your APR can change depending on an underlying benchmark or index which fluctuates from time to time. The advantage is, if the index drops, your APR will drop too. The other side of the coin is that if the index goes up, so does your APR. A fixed interest rate, on the other hand, will remain the same regardless of fluctuations to the index, offering a more stable rate but without the chance of your interest rate lowering.

Credit cards that can help to (re)build your credit rating

One of the best ways to improve your credit rating is to get a credit card and manage it well. It’s a great way to build a credit score, prove that you can make your repayments on time, and if you have other debts with high-interest rates, some credit cards can even offer you a 0% balance transfer to give you a reprise. Need to get your credit score back on track? These credit cards could be the perfect choice for you.

1) Tesco Bank 12 Month All Round Credit Card

If you have balances on other cards and you’re paying high interest on them, this card could be a great shout. Thanks to the 12 months of no interest on payments and transfers, you can clear balances on high-interest debt and give yourself some breathing room.

For the first 12 months, this card will offer you:

0% interest on balance transfers with a 0% transfer fee
0% interest on money transfers with a 3.94% transfer fee
0% interest on purchases

Perfect for: People who want to improve their credit rating and reduce the interest they’re paying on other cards.

2) Capital One Classic complete

If you have a bad credit score that you urgently need to improve, this credit card might just be the card for you. Designed to help rebuild credit, this card offers you 0% interest on spending for the first four months, then 34.94% (variable) which could give you time to transfer some balances on higher interest debts for the first four months.

Perfect for: People with a bad credit history who need to improve their credit rating.

3) Halifax Long 0% Balance Transfer Credit Card

Are you paying high interest rates on multiple cards or debts? The Halifax Long 0% Balance Transfer credit card may be the best choice for you. Not only does it offer one of the longest 0% balance transfers on the market, but the low APR and lack of annual fees make this a great option for taking back control of your finances. This credit card offers some pretty impressive features including:

0% balance transfers for 28 months
0% purchases for 9 months
No monthly or annual fee
APR 19.5% (variable)

Perfect for: People looking for a credit card with extended 0% balance transfers to clear other debts. You may even be eligible to apply for this card if you’ve already got another Halifax credit card. Need to get your credit score off the ground? These credit cards could be just what you’re looking for.

1) Barclaycard Forward Credit Card

If you need to build a credit history, this credit card could be just the thing. Created with credit card virgins in mind, it offers lots of handy features for people who are new to the world of credit cards. Not only is it aimed towards those with bad credit ratings, it also offers:

0% interest on purchases for 3 months
Price promise - a 3% interest rate reduction if you make all your payments on time for a year. Keep it up for another year and it will drop a further 2%.
A personalised credit limit to suit your income
You can choose your payment dates to make sure you always have enough money in your account for the repayments

Perfect for: Newbies to the world of credit cards who want to build their credit score with a personalised credit card.

2) Vanquis Chrome Credit Card According to Vanquis, the Chrome credit card offers their lowest APR of just 29.5% (variable) and was built for people who have low or no credit rating. A low APR is perfect if you want to start building your credit or you need to repair some damage to your credit rating. On top of the low APR, this card also allows you to:

Build your credit over time, starting with a manageable borrowing amount and working your way up
Use their eligibility checker to see if you’re a likely to be approved
Get instant approval on your application (if eligible)
Monitor your account easily through their app

Perfect for:

People with bad credit history due to no prior credit or a bad credit experience in the past, who want to make the most of a low APR. Key takeaways

With so many options available, choosing the right credit card for you can be overwhelming at times. Building or rebuilding your credit rating is a daunting task, but these credit cards could be the perfect first step to a great credit history.

Still worried about your application? Why not try a secured credit card? Secured credit cards may not be as popular in the UK as they are in the US, but they’re a great alternative for those with low credit as they don’t usually require a credit check. Instead, you’ll usually put down a cash deposit or “security” that lenders can take (in part or in full) if you miss repayments. Many banks (such as Capital One) offer secured credit cards that aren’t advertised on their website, you can always enquire online or in a local branch to see what secured credit options are available for you.

Whichever credit card you go for in the end, just remember that the key to a great credit score is not to be afraid of credit. If you monitor your finances and manage your card responsibly, a great credit rating is just around the corner.