Your credit report does not include:
- Your bank balance
- How much you earn
- Student loans
- Criminal record
- Medical history
- Parking or driving fines
- Council tax arrears
What is bad credit?
Bad credit affects millions of people in the UK. So if you have a bad credit rating, it’s important to know that you are not alone.
There are two main causes of bad credit:
Not having enough credit history
When you apply for credit, credit card companies and other lenders want to know that you can afford to pay back the money you borrow. Without a credit history, they're left in the dark about how much of a risk you might be.
This means that even if you've always managed your money well, but have never had a credit card or borrowed money, you could be turned down for credit.
People who are new to the UK are also likely to have limited credit history, which can make it difficult to get things like a mobile phone contract, home broadband or a credit card.
Problems with credit
If you've had problems with credit in the past, and ended up missing repayments, you could find it hard to get accepted for credit in the future.
The good news is that there are steps you can take to repair your credit rating, and prove to lenders that you can be responsible with credit.
Applying for a credit card if you have bad credit
Poor credit doesn't always mean you can't have a credit card.
Some lenders, like Capital One, offer credit building cards that are specially designed to help people improve their credit rating.
Credit building cards usually come with a smaller credit limit to start off with, but can increase as you show you can manage credit responsibly.
It's really important to use your card responsibly by making at least your monthly minimum payment on time and staying below your credit limit. Not doing so could harm your credit score further.
Remember to check before you apply
Some lenders now offer free eligibility checkers that let you know your chances of being accepted before you apply.
Capital One's QuickCheck gives you a definite yes or no - so you can be 100% certain if you'll be accepted before you apply – without affecting your credit score.