Top 10 credit myths
These are credit cards that may be easier for you to get if your credit record is not as good as it could be. When you apply for credit, the lender normally gives you a credit score based on your credit information from a credit reference agency, your application form and any details they have if you’re already a customer. They do this so as to assess the likelihood and risk that you will default or be unable to pay it off.
If you have found it hard to get a credit card because of your income, employment status or because you are new to the UK, or simply because you have a poor credit score, then a well-managed credit card could help you to rebuild a positive credit history. However it is not to be done lightly, as these type of credit cards often have low credit limits at first and a high APR.
The first thing to do is to work out why you may have been turned down for credit cards in the past. Is there something in your credit report that you are unaware of that is holding you back? Is all of the information correct? You may be able to take action and improve your credit score over a short period of time, increasing the chances of getting the card you are after. It also pays to reconsider all of your requirements and deciding exactly the type of credit card you need and what you can do without. For example, seeking a lower credit limit and going for a card with a higher interest rate (which is mostly the case for credit cards for poor credit) could help you have your application accepted. However, this makes the need to repay your credit card punctually every month and in full even more important, as you’d incur high charges if you don’t.
To help avoid perpetuating a spiral of declined applications, you can check your chances of being approved before you apply for a credit card. Experian CreditMatcher shows you products together with your eligibility rating, which is your likelihood of being accepted for each.
When you apply for credit a search is recorded in your credit report. Knowing your chances of your approval can help you make a decision whether to apply in the first place. This is because numerous credit applications can suggest you are over-reliant on credit to supplement your income. So try not to make more than one application in a short period – several applications may negatively impact the way a lender views you.
If you compare credit cards before you apply, it leaves a soft search on your credit report that won’t be visible to lenders, and won’t affect your credit score.
If you have obtained a credit card despite a bad credit history, paying it off in full on time, every month, can help rebuild your credit history provided you are also meeting your other credit commitments. Setting up a direct debit for a fixed percentage, the minimum payment or above can help make sure you don’t forget to make your repayments.
As your lender sees you pay off your credit card successfully, you may see your credit limit (and your credit score) increase.
Try not to add to your existing debt while paying off your credit card.
Experian CreditMatcher uses your credit information - as well as information you provide about your requirements and financial circumstances - to show you products that are matched to you.
This means you can see a list of credit products that you are more likely to be accepted for, and as it is a ‘soft search’ only you can see it on your credit report. For a credit product search that matches your credit information just visit Experian CreditMatcher.
Experian CreditMatcher does not give advice on the suitability of products to customer’s needs. If you would like to get help on which products suit your needs, it is best to seek help from a financial adviser.