What is a credit card for bad credit?

A credit card for bad credit, sometimes called a credit builder card, is designed to help people who’ve had credit hiccups or who haven’t built up much of a history yet. They can be easier to get approved for than standard cards, so can be a good option if you’ve struggled with borrowing in the past or are just getting started.

These cards usually come with lower credit limits and higher interest rates, so they’re not meant for big spending. But use them for small purchases and clear your balance every month, and that will show lenders you’re managing your money well – which could boost your credit score over time.

Used the right way, these cards are less about spending and more about rebuilding your financial reputation. But remember that they aren’t an instant fix for poor credit: it can take months or years to rebuild your credit score.

Are you eligible for a credit card for bad credit?

Wondering if you might qualify for a credit builder card? While different providers have their own rules, they typically look for the same basic things:

  • Age and residency: You need to be at least 18 and living in the UK.

  • Income: A steady income shows you can handle repayments.

  • Bank account: You’ll need a UK bank account to manage payments easily. Some banking providers prefer you already bank with them but it’s not always essential.

  • Limited recent credit activity: Too many credit applications in a short period can make lenders wary, so be mindful of how often you apply.

Every lender has its own specific criteria, so it’s a good idea to check what the provider requires before you apply.

How do credit cards for bad credit work?

Credit cards for bad credit work just like regular cards, but they’re easier to get if your credit score isn’t perfect. They’re designed to help you build your credit record over time – as long as you use them responsibly.

Applying can be simple

You’ll need to give basic details like your income, outgoings and employment status. The lender will check your credit history and decide what credit limit to offer. Some providers have eligibility tools, so you can see your chances before applying, with no impact on your score.

Once you’re approved, start spending carefully

These cards often come with lower credit limits and higher interest rates, so it’s best to spend only small amounts. If you pay off the full balance every month, you won’t pay interest and you’ll start building a more positive credit history.

Stay on top of your repayments

Making at least the minimum payment on time is vital. Missed or late payments could harm your score further. A direct debit can help you stay on track, and some providers may even increase your credit limit after a few months of sensible use.

How much can I spend on a credit card for bad credit?

Credit cards for bad credit usually start you off with a fairly low spending limit. That’s because lenders want to see how you manage the card before offering you more. If you use it well, your limit might go up over time.

When setting your credit limit, lenders usually look at your income, credit record and existing financial commitments. A steady income shows you can manage repayments, while a history of missed payments or lots of current debt may lead to a lower starting limit.

Some lenders may let you check your eligibility first, so you can see what kind of limit you might get without affecting your credit score. Even if your limit is small to begin with, using your card sensibly can help boost your credit over time. Be sure to avoid withdrawing cash on your credit card, as the charges plus interest can work out much higher than making purchases with it.

Can I get a higher credit limit in the future?

Providing you use your credit card responsibly, lenders may well boost your limit over time. Try to use the card for planned purchases you’d make anyway, then pay it off in full each month to keep things healthy.

A good rule of thumb is to keep your spending under 50% of your current limit, which shows you’re not relying too heavily on borrowed money. If managing bigger amounts feels tricky, start small – maybe £50 a month – and clear it promptly.

Understanding your credit file, rather than just your credit score, can also help explain why lenders may or may not offer a higher limit. Most will check your score with one or more of the three main UK credit reference agencies: Experian, Equifax, and TransUnion. Each agency scores you slightly differently using its own range, but you’ll generally end up in a similar overall category across all of them.

In late 2025, Experian updated its scoring system, increasing its maximum score from 999 to 1,250 and changing its score bands. This means your Experian score or band may look different, even if your borrowing habits have not changed.

Under the new system, Experian looks beyond cards and loans, factoring in things like mobile phone payments, overdraft habits, cash withdrawals and mortgage overpayments. That’s good news if you’ve struggled with credit in the past, as it offers more ways to show responsible money management, even without lots of traditional borrowing.

Here’s a handy guide to the score ranges used by the main UK credit reference agencies:

Credit agency

Score range

Excellent

Very good

Good

Fair

Low/Poor

Very poor

Experian

0-1,250

1,121-1,250

1,001-1,120

861-1,000

641-860

0-640

N/A

Equifax

0–1,000

811-1,000

671-810

531-670

439-530

0-438

N/A

TransUnion

0–710

628-710

N/A

604–627

566–603

551-565

0-550

Other credit reference agencies in the UK

In addition to the main UK credit reference agencies, others use alternative data or focus on business credit. Here’s a quick guide to how they work.

Agency

Name of credit score

How it works

Crediva

Crediva Score

This score looks beyond the usual credit history, using extra financial info to give a view of your creditworthiness – especially handy if you have little or no traditional credit record.

Credit Kudos

Signal

Signal taps into Open Banking data and smart algorithms to see how you manage your money and predict your likelihood of repayment. Credit Kudos say it gives lenders a fuller picture of your financial behaviour with the intention of boosting acceptance levels.

Dun & Bradstreet

Dun & Bradstreet Score

Every business has a credit score that tracks payment history, balances, transactions, and more. D&B use this information to calculate business credit scores and ratings, which lenders, suppliers and partners can check to assess financial health.

Checking your score regularly can give you a better sense of your financial health and how close you are to moving up to the next category. Sometimes, just a small tweak to your finances can make a big difference!

Remember, your credit score isn’t the full story.

When you apply for a credit card, lenders will usually take a much broader look at your overall credit history. They’ll see your score, of course, but it’s just one part of the bigger picture. Things like your payment history, current borrowing and how you manage your accounts all play a role in their decision.

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Page updated on 10th October 2025, Reviewed by Richard Groom