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Guide to Credit Builder Cards

A guide to

By Nevena Mulyachka and Mark Todd
Nevena Mulyachka is moneyhelpline’s marketing manager, specialising in money products such as insura
nce, credit cards, loans and savings. Mark Todd is one of the founders of energyhelpline and moneyhelpline. He is regularly on BBC1 and Radio 5 Live commenting on switching and saving.

Last updated 04/04/16

Did you know

By getting any sort of credit and operating it well (never missing payments and staying within the limit), you can begin to repair a damaged credit history, or work on building a new one. Some card providers are better for this than others, abiding by the conditions of the lending code (a code of practice – not a credit law).

The lending code ensures that your lender is more supportive about a range of difficulties including requiring special behaviours for how to treat you if you’re either in financial difficulty or if you’re suffering from mental health problems.

Once you’re in:
The biggest myth when it comes to your credit score is that no credit would mean a good credit score.On the contrary, lenders use credit scores to predict your behaviour when you are in credit. So when you are building your credit history, getting a credit card is a good start. But don't just let it lie in your wallet or at the bottom of a drawer.

Do your utmost to avoid borrowing big amounts and preferably borrow small amounts each month, e.g. you can do your supermarket shopping on it or pay for your car's fuel on it.

Strictly repay every month in full so that there’s no interest cost - borrowing on a credit builder card is usually expensive.

Always stay within the credit limit and make sure you pay at least the minimum required amount.

Usually after 6 months your credit score will improve and you could be offered a longer interest-free period or a larger credit limit. You could also become eligible for better credit cards.

To keep track of your credit score, compare free credit report trials here.


Where to get your first credit card?

Getting your first credit card can be tricky. You might look at the top offers on the market but they are unlikely to be achievable for you. So how do you get one?

  • Get on the electoral roll! - Before you apply for any credit, register to vote. That raises your chance at being approved massively because it serves as proof of address for banks.
  • Go to your own bank - You are more likely to be approved for a credit card by the bank/building society where you get your monthly salary/ savings/ student loan/ etc.
  • If that doesn't work, try cards for credit builders - they usually have higher APRs and not very long 0% offers or none at all but will serve the purpose to build your credit score if you pay them in full each month. Such cards are Barclaycard's Initial with 3mths 0% on purchases and the aqua Advance credit card.

Compare more cards for credit builders


Credit Cards

 These guides are for informational purposes only and do not constitute advice. For best personal advice contact a financial adviser.

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