What is credit history?
Your credit history is a log of all your financial information that focuses on a number of different areas, including how you’ve handled any outstanding debts.
Paying off outstanding credit card bills on time, over a long period , can demonstrate reliability to lenders — which can make them more likely to approve you for important borrowing, like loans and mortgages, in the future.
Any record of making late payments or defaulting, taking out cash on your credit card and borrowing more than you can afford can blemish your credit history — lowering your credit score and potentially making it less likely you’ll be accepted for additional credit.
Why is credit important?
Even if you've never had problems with debt, you might still get refused for credit. That may be because, if you haven’t had credit before — like a loan or Credit card — lenders can’t see how well you can manage it. This means a blank credit history can make lenders feel just as uneasy as a history filled with missed payments.
Credit reference agencies use your credit history and other factors to give you a credit score and often use it to understand how well you manage money and repay what you owe. A limited credit history means that lenders may not be able to work out if you’re a high-risk borrower or a low-risk borrower.
Unfortunately, this does mean that many lenders may turn down applications from customers with little to no credit history, or they may offer a credit card with a much higher APR to protect themselves against the risk of the borrower not repaying. However, there are alternatives to conventional credit cards for those with a chequered credit history.
Is it better to have bad credit than no credit history?
Having no credit history or a bad credit history can both hold you back – but it can be easier to build a good credit history from scratch than it is to improve your credit score after a difficult financial period.
Here at Vanquis Bank, we offer ‘credit builder’ Credit cards that you can use to build and improve your credit rating.
A bad credit history may be indicative of a poor credit record and can be a risky investment, from the bank’s perspective, to lend that person money.
Although having no credit history can also hold you back, it’s much easier to demonstrate you’re a trustworthy borrower with a record of good financial practice right from the get-go than it is to repair a poor credit history.
Bad Credit
Once you have bad credit, it could take some time to repair it. If you’re looking for help with managing your financial problems, it’s a good idea to speak to a professional financial advisor.
You can seek advice from free money advice services such as:
- StepChange Debt Charity - For debt advice throughout the UK phone 0800 138 1111 or visit www.stepchange.org
- MoneyHelper - For free, unbiased and easy-to-access money tools, information and advice, visit www.moneyhelper.org.uk/ or phone 0800 138 7777 to speak to a Money Adviser
- National Debtline - If you live in England, Wales or Scotland phone 0808 808 4000 or visit nationaldebtline.org for debt advice and information
How to build up a credit history
It can take several months, or even years to build a good credit score.
To help you do this it can be a good idea to keep a record of your financial habits and make sure you’re keeping on top of your repayments. This can show potential lenders that you can pay back what you borrow.
Read our full guide on improving your credit score for tips to consider on building up your credit history.
Getting your first Credit card with no credit history
Don’t worry, if you’ve got no credit history you can still start to build up a credit score.
When you apply for your first Credit card, it’s worth considering a Credit card for bad credit as a way to build your credit score. If you’re a student, it might be worth looking at specific credit cards for students - this could help you build your credit score before you start a paid job.
If you’ve never had to use credit before and you don’t know which card you might be eligible for, you can use our quick and easy eligibility checker.
Student credit cards
Full-time college and university students can apply for a student Credit card. These products are specially designed for students who don’t have the credit score and income to be approved for a standard credit card.
How student credit cards work
To stop debts building up, credit cards for students generally have a lower credit limit than standard Credit cards. Their credit limits are typically between £250 and £1,000.
As with standard credit cards, student credit cards have a pre-arranged credit limit. If you pay the balance that you owe off in full before the date the payment is due (your statement due date), you’ll avoid being charged a monthly rate of interest. Your balance will take longer to pay off if you just pay the minimum amount. If you miss any monthly payments, this can damage your credit history and often incurs additional charges.
How to get a student Credit card
We don’t offer a specific student credit card, but you can still apply for one of our standard credit cards, using our quick and simple enquiry form to check your eligibility online. Within 60 seconds we can help you understand whether you’re entitled to a Vanquis Credit Card, so you can start building your credit today. This is a ‘soft check’ too, which means that it won’t go on your credit record, and it can’t spoil your credit rating in the future.
What is adverse credit history?
Adverse credit means a less-than-perfect record of repaying credit commitments. It’s another way of saying bad credit or poor credit. If you have an adverse credit history, this will usually be because you’ve missed repayments on a Credit card, loan or mortgage. This will make it harder for you to get approval for credit or finance.
If you default on repayments, the money might have to be recovered by a debt collection agency or a County Court Judgement (CCJ). This information can stay on your credit file for up to six years from the date of account closure, and it can continue damaging your chances of getting credit. Don’t worry, your chances can improve over time, as long as you keep up with your current repayments. Also, the record of your payment default will be removed automatically after six years.
Checking your credit history
There are three main credit referencing agencies in the UK: Experian, Equifax and TransUnion. Each of these agencies collects information about how well you manage credit. For a small fee, you can usually get a copy of your credit report through the credit agency's website, however these are often free of charge.
Try to remember that different lenders use different credit agencies to check your credit history. This means that before you apply for credit, it’s a good idea to find out which agency your chosen lender uses, then get a copy of your credit report to see your credit rating.
Alternatively, you could sign up to a free credit-checking service like Experian, Credit Karma or Snoop, or take an eligibility check with your lender before you apply.
Checking your eligibility for a credit card
An eligibility check is a free service offered by lenders to help you find out if one of their credit cards is suitable for you. These checks are usually what is called a ‘soft credit search’, meaning they don’t damage your credit score, unlike the ‘hard searches’ carried out by credit referencing agencies. A ‘soft credit search’ will give you an initial decision without leaving any trace of a search on your credit file.
The Vanquis eligibility checker is a free service that will give you an instant initial decision, without impacting your credit score. Find out more by checking our credit card eligibility tool.
Why choose Vanquis?
Vanquis Bank — part of the Vanquis Banking Group — has been providing bespoke credit solutions to its customers and helping people handle their finances for over 140 years.
Our thorough “soft” eligibility checks help to provide confidence that customers will only be accepted for a credit card if they can make the repayments and are suited to the APR issued — protecting you and others from mounting interest.
We work hard to make sure that all our credit cards are easy to apply for and simple to manage. Don’t want to take our word for it? Check out our Trustpilot reviews to read what our customers say.
We’ve helped over 5 million people on their journey to better credit. Why not join them and apply online today?
What are the alternatives for someone with no credit history?
It can be challenging for those with no credit history to build their credit rating from the ground up.
However, there are many credit alternatives that can help raise your credit rating.
Just one example would be The Vanquis Credit Builder Credit Card, which has helped many customers get started on their credit journey. We handle all the soft eligibility checks— helping you get started quickly.
FAQs
What APR can I get if I have no credit history?
The APR interest rate that banks charge is at the discretion of the bank. If you have no credit history at all, banks may charge higher rates.
Typically, most lenders and banks offer credit cards specifically for those with no credit history, at a higher interest rate. This is because the bank may not be able to confirm if someone is what they consider to be a trustworthy borrower, and they use the higher interest rates to protect themselves from those that can’t re-pay the money they’ve borrowed. However, it also means that those with poor or no credit history may still be able to access the benefits of a card, as long as they qualify and have a successful application.
Vanquis offer a representative 37.9% APR variable — meaning that APR and credit limits may vary based on your financial circumstances.
What credit limit can I get if I have no credit history?
Although a lack of credit history may not help your application, it’s not the be all and end all.
Your interest rates are often determined by how well you’ve made repayments in the past, but a credit limit is usually focused more on affordability — meaning, can you afford the repayments?
What information do I need to provide to apply for a Credit card with no credit history?
Even if you don’t have a credit history, the application process is very similar to a standard credit card.
You will need:
- Personal details like your full name and date of birth
- Address details and residential status
- Contact details like your email and at least one telephone number
- Employment status and income — This would include any wages, benefits, and pensions you receive
Once the bank has these details, they’ll often sort the process for you — conducting an eligibility check and giving you a quote within the day.
If you’re worried about eligibility checks impacting your credit score, don’t worry. Vanquis perform “soft” eligibility checks that don’t affect your credit score — so you can see roughly what you’ll be offered before you commit to a card.
How long does it take to build a credit history?
Unfortunately for those looking for a quick fix, it can take a while to build a good credit history.
If you have no credit history and are looking to build a good track record of credit, it can take up to six months to generate a reasonable score and potentially longer to achieve a good or excellent score. This can all depend on how you manage your borrowing.
Good financial practice over time — like paying loans back on time and not exceeding credit limits — can help to speed up the process of improving your credit score, so be patient.
Can I apply for a credit card with no credit history?
Everyone aged 18 and over can apply for a credit card with no credit history – but there’s no guarantee you’ll be accepted.
Those that are accepted for a credit card, with little to no credit history, are likely to find that their credit limit is lower, and their interest rates are higher than someone with a stellar record of managing their credit and loan repayments.
