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The best options when applying for your first credit card

I am applying for my first credit card to help me build up my credit score.

I intend on paying it off every month – what are the best options? 

Will I be able to get a standard deal or should I get a credit builder card?

Useful tool: Using a credit card responsibly is one of the most simple ways to build up your credit rating

Emma Gunn of This is Money replies: You would have thought that credit card companies would be champing at the bit to sign up new borrowers, particularly those who have been disciplined enough with their finances that they’ve had no cause to borrow before.

However, unfortunately the way credit scoring works means that with no previous history of responsible use or repayment history these are exactly the people who are frequently turned away.

Those who are disciplined about their finances and have never had the need to borrow or younger people who haven’t had need for credit yet, can often struggle when it comes to getting their first credit card.

As you’ve identified, the first thing to consider is whether you need a specific credit builder card or you have a high enough credit score to qualify for a standard deal.

John Webb, consumer affairs expert at credit referencing agency, Experian explains: It’s quite difficult to say at what point you may want to consider a credit builder credit card as each lender will score your application slightly differently depending on their individual lending criteria.

Getting one of these cards could be an option if you’ve found it hard to get a credit card in the past for various reasons. It may not be because your credit score is low – it could be because of your income or job, or you haven’t had time to build up a credit record yet.

The first step, before making an application for credit, is checking your credit report. 

Taking the time to understand your current position by checking your credit report can help ensure it is in the best shape to support your application. It is wise to check your credit report with the three credit reference agencies.

Making multiple applications for credit can damage your chances of being accepted, so shopping around is definitely the right thing to do before you commit to any credit deal – I would encourage anyone to do this as finding the best deal can save you money in the long run.

There are a number of comparison services that allow you to check your chances of being accepted before you make a formal application.

These services will tend to do a soft search on your credit report that will not impact your score.

Experian’s CreditMatcher service is free to use and will give you your score and allow you to get an eligibility rating for the credit cards you’re more likely to be accepted for, including credit builder cards.

Credit card best buys

Credit score: The first step before you apply for any credit cards should be to check your rating

Credit score: The first step before you apply for any credit cards should be to check your rating

Emma Gunn of This is Money adds: There are scores of credit cards on the market, each offering slightly different perks and rates which can make whittling down the list to pick your first credit card seem daunting. 

As a general rule, you want to avoid looking at the top of the best buy tables for your first credit card, particularly if you don’t have a very strong score.

Less popular cards are more likely to accept you without a perfect score as there is less competition for them.

You may not qualify for the leading rewards cards offering air miles or cashback perks for spending, but that doesn’t mean you won’t be eligible for a card which gives you something back.

And if you make sure you clear it every month you can really make the most of rewards and cashback schemes. 

As Webb suggests, using an eligibility checker or smart search tool will help you see which deals you are likely to be accepted for., uSwitch, MoneySupermarket, TotallyMoney all have their own versions, as does referencing site, Experian.

One from a comparison site or credit scoring tool will bring up a list of suggested cards, with a percentage scoring showing how likely it estimates that you will be accepted by each one. 

If you have your eye on a particular lender or deal, MBNA, NatWest, Barclaycard, Capital One and American Express all also have their own eligibility tools.

If a quick search using one of these tools shows you will struggle to get accepted you may then want to consider a card designed for those with a lower score – a credit builder card.  

These deals will accept those turned away by banks for a low credit score. You will find they offer much lower credit limits and higher interest rates (often up to 35 per cent) than a standard deal.

Again the number one rule is to pay them off each month and make sure you stay within your limit and pay on time, otherwise your debt and your credit rating will spiral. 

When it comes to picking the best deal, there are a handful of companies out there offering decent cards including. These include lenders such as Vanquis, Aqua, Aquis, Marbles, Capital One and both the Barclaycard Initial or Tesco Foundation ranges .

Some come with the ability to lower your interest rate over time or increase your credit limit. 


Here are a few top tips from Experian expert, John Webb:

Future lenders will be looking for accounts with a history of payments made on time, so do not miss payments. Missing a single payment can even reduce your score by up to 130 points.

Try not to use the maximum available credit you have been given. In fact, try and keep this as low as possible. This can positively impact your score.

Keeping the card active is what lenders like to see, so consider putting on some very small purchases every month then paying the card back in full. Credit builder cards typically have higher interest rates than other cards, so to avoid paying more try to pay back in full every month.

If you do open a new credit building card you will likely see a short term dip in your score. Don’t be alarmed and follow the advice above, and over time this will help improve your credit score.