Poor Credit Rating: Credit Card for Poor Credit
Many people in the UK have a less than perfect credit rating. Often this can be a result of a temporary financial difficulty or even simply due to bad financial management.
Unfortunately, this can affect a person’s ability to get credit as lenders typically check a credit rating before deciding to lend money or advance credit. Evidence of payment problems can be viewed as an indication that the person concerned is not a responsible borrower and may result in restricted access to credit.
Often a person will only realise that they have a poor credit rating when they apply for credit and are turned down. A person with a poor credit history can apply to Vanquis for a credit card as Vanquis will consider applicants with a poor credit score. Responsible use of the Vanquis Visa Card can contribute towards rebuilding a poor credit history that has been tarnished by a few problems in the past.
Vanquis has already provided Visa Credit Cards to over 3 million people+ in the United Kingdom, many of whom had a bad or poor credit rating.
What is a Poor Credit Rating?
A credit rating is an evaluation of the creditworthiness of a person, in other words the likelihood that a person will be able to repay and will actually repay the money lent and any interest due. A poor credit rating can mean that a credit provider believes there is a high risk that you will not be able to repay all the money you borrow.
Credit ratings are prepared by agencies like Equifax, Experian and Call Credit which gather data on people that credit providers can use to assess how likely a person would be to repay debts. However, each lender uses its own guidelines to assess whether to lend money or extend credit to an individual. That means that while one lender may refuse you credit due to a poor credit history, another lender may be willing to lend you money. Vanquis Bank will consider applications from people with a poor credit record.
How You Can Get a Poor Credit Rating
Any or all of the following many lead you to getting a poor credit rating:
Making late payments
Making debt repayments on time is an important factor in the overall credit score, so a history of regularly paying your debts late may lead to you having a poor credit score.
Missing payments completely
Failure to make repayments can suggest that you are unable to afford your current engagements.
Debts written off
If you have had debts written off by a previous lender, due to a default rather than the settlement of a bona fide dispute, this is typically because the lender believes you will never be able to repay the debt, so a potential lender may view this as a warning sign about your finances.
Entering certain debt solutions
If you have entered into an IVA (Individual Voluntary Arrangement) or similar arrangement, a potential lender can see that you had trouble with making payments in the past. An IVA will remain on your credit history and affect your credit rating for six years.
This along with the missed repayments will be recorded on the credit history and may affect the ability to get loans and mortgages in the future.
County Court Judgements (CCJs)
CCJs are evidence of past repayment defaults and remain on your credit history for six years.
Having a high level of debt
Having a high overall level of debt compared to your overall income can be a sign that your finances are under strain and may lead a lender to question whether you can manage additional borrowing.
Making several applications for credit at any one time or within a short period of time
Repeatedly applying for credit and being rejected can create a `spiral` of rejection. A large number of applications will be seen on your credit history and may affect your ability to get credit.
Rebuilding Poor Credit↗
If you have identified you have a poor credit rating, there are steps you can take to improve credit rating. These can include getting a mobile phone contract or getting credit from a lender who will accept applications from those with poor credit records. Both of these steps can allow you to build a history of meeting repayments on time which will be recorded on your credit history. Vanquis will consider applications from those with poor or bad credit histories.