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Build your credit score with a credit building card
Check eligibility and compare credit building credit cards
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What is a credit builder card
If you have little to no credit history or a poor credit score, borrowing money at competitive rates can be difficult. Credit builder cards are designed to help you establish or improve your credit score over time.
Also known as bad credit or poor credit cards, these cards typically have more flexible eligibility criteria, making them easier to qualify for – even if you have a low income or a county court judgment (CCJ) on your record.
Because they are aimed at those with weaker credit histories, credit builder cards usually come with lower credit limits and higher interest rates.
However, by using them responsibly — making regular purchases and paying off your balance on time — you can gradually boost your credit score and improve your chances of qualifying for better financial products in the future.
“Credit builder cards should be used as tools to improve your credit. Use them for daily expenses and pay off the balance in full to get the most out of them.”
Are credit building cards a good idea?
Credit building credit cards can be a good idea if you're trying to improve your credit score or can’t qualify for better deals in the market. Some reasons for that might be:
You have no history of borrowing or have never had a credit card before
You have a record of missed payments
You've declared bankruptcy in the past
You've had a CCJ against your name
Using a credit builder card carefully could improve your credit record. To do this, you must make all your repayments on time and stay within your credit limit – typically it takes about three to six months to see any changes in your credit score. This also means staying on top of your other bills and not missing payments.
Paying back what you borrow on time looks good to banks and other providers, even if you’ve had debt problems in the past. Credit builder cards are a good way of proving you can pay back what you borrow. So the next time your finances are looked into, lenders will see you've made a conscious effort to repay your debts.
Having one of these credit cards to build credit should make it easier for you to get accepted for credit cards, loans or mortgages in the future. You’ll also have more options open to you, so you’ll have a better chance of getting the best deals on the market.
How to get a credit builder card
Follow these simple steps to get a credit building credit card:
Use an eligibility tool
To find the best credit cards to build credit, you can use an eligibility tool to match you with the cards you are most likely to get.
Instead of having to go through all the different deals yourself, eligibility tools use the details you provide about your circumstances and matches you with the cards you have the best chance of being approved for.
It doesn't affect your credit score, and you can pick the ideal card from a more manageable selection.
Compare credit builder cards
When you get the results from an eligibility tool you’ll be able to compare the deals available to you.
There are two main things to consider here - the interest rate and the credit limit. You may find that credit building cards advertise a minimum credit limit, which is the lowest credit limit you'll get if approved. Similarly, there is a maximum credit limit.
However, credit limits tend to be lower compared to standard credit cards, and interest rates tend to be higher. If you use your credit card carefully, your credit limit might increase over time.
Fill out an application
Once you've chosen the deal you like, fill out an application form.
Typically, you'll have to provide your name and contact details, as well as some basic financial details.
Make sure the details you provide are accurate, as incorrect information could lead to you being rejected.
After that, it can take up to 10 working days to receive your card once approved.
Expert tips for credit building credit cards
Follow these tips, and you'll be well on your way to improving your credit score:
Use an eligibility tool. Use an eligibility tool like that provided by our partners at Experian before you apply to help you find the cards you’re most likely to be accepted for.
Avoid multiple applications. Don’t apply for cards you’re not likely to get, and don’t make multiple applications, as this can make you look desperate for credit.
Use credit builder cards carefully. Always try to pay the balance in full to avoid paying interest, and make repayments by the due date. Stay within the credit limit too.
Be patient. Building your credit score takes time and effort, and it can take six months or so to see a change. You can sign up with any of the three credit reference agencies (CRA) to track your credit score.
Pros and cons of credit building cards
Pros
Cons
How to use a credit building credit card
Take a look at the tips below to help you get the most out of your credit building credit card:
Pay off the balance in full each month (if you can)
Credit builder credit cards tend to charge high rates of interest, making it important to pay off your balance in full each month. That way you won’t ever have to worry about paying interest.
If you can’t pay off the full balance, clear as much of it as you can afford to as interest will be charged on whatever is left over.
Meet at least the minimum monthly repayment
Whatever you do, it’s crucial that you pay at least the minimum amount stated on your credit card bill each month. Failure to do so will result in a late payment fee of around £12 and it will also leave a negative mark on your credit file. If you’re worried you’ll forget, set up a monthly Direct Debit for the minimum amount so that your payment is made automatically.
Be warned that only paying the minimum amount will mean you pay a lot more in interest and it can take a very long time to repay your debt.
Use your card for regular, small purchases
If you use your credit card for small purchases, you’ll find it much easier to stick within your credit limit and you won’t have as much to repay each month. Making small purchases regularly and repaying them quickly can help you to rebuild your credit score.
Never use your card for cash withdrawals
Using a credit card for cash withdrawals means you’ll usually incur a cash advance fee, plus interest will be charged from the date of the transaction – even if you pay off your balance in full that month. This makes it a very expensive way to borrow and should be avoided (unless it’s an emergency).
Other options for borrowing with bad credit
Credit cards are only one way to borrow money if you have bad credit. There are other products that may be more appropriate depending on how much you need to borrow, and their eligibility requirements. Here are some alternatives:
Bad credit loans
These are loans aimed at those with bad credit.
Interest rates on bad credit loans are much higher than on other kinds of personal loans, making them an expensive alternative.
However, these could be an option if you need to borrow more than may be possible with a credit builder card.
Guarantor loans
These are loans where you get a close friend or family member to act as guarantor, who agrees to repay the loan for you if you're unable to.
Even though guarantor loans have high interest rates, you may be able to borrow a larger sum because the lender has added security that the loan will be repaid.
Being a guarantor is a major commitment and whoever agrees to be the guarantor should be aware of what it means. They'll also need to have a good credit score and may need to be a homeowner.
Credit union loans
Credit unions offer savings accounts and loans to local communities. Loans are often low cost and significantly cheaper than from short-term lenders. If there's one in your area, they could be a good option.
To borrow from a credit union, you may have to become a member. Some require you to start saving with them first.
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