Feb 16

Bad credit holding you back?

There comes a time in everyone’s life when you need to apply for credit. This can be in the form of a loan, credit card, overdraft, store card, or the biggie, a mortgage. Your credit score and credit history determine whether or not your application is accepted and if your credit is bad, you may find yourself in a bit of a pickle.

So, what happens if you need a credit card, but your application has been rejected? It stings a bit, right? That’s understandable, but don’t make the mistake of applying for as many credit cards as possible in the hope that one says yes. The first thing you need to do is take stock and understand what’s wrong with your credit. Once you know the problems, you know where to begin fixing them.

Sorting out finances

“Yes” isn’t always the right answer

Those with, shall we say, imperfect credit histories may still be able to acquire a credit card. There are specialists who consider applications from people who have been made bankrupt in the past or received CCJs. If this is you, you’ll be classed as a “high risk” borrower and so interest rates on your lending will be higher, (sometimes far higher), and credit limits lower.

If you don’t feel you are able to pay off the balance every month, then this may not be the time to get that credit card. If you can, then it’s a chance to start building up your good credit rating again.

Be responsible

Making sure you compare your offerings is an important step. You may not be able to access some of the most attractive credit card deals, but there could be some that allow you to have better interest rates and limits over time. That is of course, if you’ve proved to be a responsible lender with the card. Make timely payments, don’t go over your credit card limit and you’ll avoid penalty fees as well as increase your credit rating.

Credit cards


When comparing credit cards, watch out for misleading headlines. The rate you’re drawn to may not be the one you end up with. Only 51% of people accepted for the card need to be awarded the advertised APR, so you could be offered a different rate.

Know your limits

Before you make the decision, really think about what the credit card is for. There are times when a credit card is the best choice, for example. Fee-free transactions abroad are great when you’re on holiday. Lots of providers offer apps or management tools that really help you keep on track with your payments too.

To find out more about the credit cards you might be eligible for, check out Moneymatcher. It will soft search for you to show you the best deals that you’re more likely to be accepted for without impacting your credit file. It also looks at some of the finer details and features, such as rewards, fees and APR, so you find the deal that truly fits you best.

The MoneyGuru

If credit isn’t an option for you right now, a pre-paid card might be the way to go. For a full guide on how these can be used abroad and online, take a look at Money Guru’s prepaid card guide.


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