With no credit history, getting lines of credit and building your credit rating can be challenging. You'd appear as a risk to lenders with nothing in your credit file.
The best way to improve a credit rating is by using credit builder cards.
You may be wondering why your credit rating is so important, and that answer helps lenders determine your creditworthiness. If you've got a bad credit score, there won't be a lot of credit card options out there for you. But don't lose hope just yet.
In this article, you'll learn all about credit cards, going from a low credit score to a good credit score, and we'll introduce you to the best credit cards to help improve your credit file.
| Card Name | Score | Details |
|---|---|---|
| 1. Tesco Bank Foundation Credit Card | ★★★★★ | Learn more |
| 2. Barclaycard Forward Card | ★★★★★ | Learn more |
| 3. HSBC Classic Credit Card | ★★★★★ | Learn more |
| 4. Aqua Classic Credit Card | ★★★★★ | Learn more |
| 5. Asda Money Select Credit Card | ★★★★★ | Learn more |
| 6. TSB Student Credit Card | ★★★★★ | Learn more |
| 7. Capital One Classic Credit Card | ★★★★★ | Learn more |
What Is a Credit File?
You could look at your credit file with one of the many credit reference agencies available online to better understand your credit report. The two largest credit reference agencies in the UK are Equifax and Experian.
A credit report typically comprises a history of previous lines of credit, loan balances, and payment history.
If you have not taken out or used any credit, your file will be pretty empty. Once you start taking out credit, your credit score will improve. Credit card providers and other lenders will run a credit check to see your credit score and if you're reliable to lend credit to.
A credit score comprises a number up to 999, and different tiers determine how your credit score is rated. Depending on which credit reference agency you use, the credit score tiers may change, but below is how Experian categorises each credit rating:
- Bad credit score: 0 up to 720
- Fair credit score: 721 up to 880
- Good credit score: 881 up to 960
- Excellent credit score: 961+
To increase your credit score, you need to start a line of credit and repay it on time. With limited choice for people with poor credit or no credit rating, there are credit cards designed to help improve your credit rating.
What Is a Credit Card for Limited Credit History?
Some credit cards provided by specialist credit card providers are designed for people with no credit history. There are various types of credit cards, but a credit builder is the best for a first-time credit card user with no credit history. A credit builder credit card helps you create a more positive credit report, so you can go from having no or a poor credit rating to a good one.
You use a credit builder card just like any other credit card, to make purchases and then repay the balance each month.
However, credit builder cards usually have a lower credit limit than regular ones. You use the balance and may make periodic payments to repay the balance on time. You can build your credit score; some credit card providers will increase credit limits for good card management.
Credit Builder Cards: Pros and Cons
If you've never had a credit card, you may be unsure what having one entails. We've compiled a list of the pros and cons of having a credit card, especially if you've got a poor or no credit history.
Pros
✔️ Improve your credit score: The whole purpose of a credit builder card is to improve low credit scores. Using your credit card to make purchases and avoiding missed payments will help your credit rating improve.
✔️ Spread the cost of purchases: A credit card can be super helpful as it allows you to spread the cost of purchases, making them more affordable. Credit cards are ideal if any household emergency crops up mid-month; you can use that balance to cover the expenses until payday.
✔️ Purchase protection: card purchases between £100 and £30,000 are covered under the Consumer Credit Act.
✔️ More likely to be accepted: Credit builder cards tend to have low application criteria, designed for people with no or poor credit.
✔️ Interest-free purchases: Some credit cards offer an interest-free period that you can take advantage of; this means you don't have to pay interest on purchases for a set time.
Cons
❌️ Risk of getting into debt: If you fall behind on your repayments, you may get into debt. However, if you set up a direct debit from your debit card to your credit card, you can avoid missing payments and stay out of debt.
❌️ Lower credit limit: Compared to other credit cards, cards for poor credit tend to have lower credit limits. You're seen as a risk to lend to when there's not much going on with your credit report. However, the more you work on improving your credit score, the more likely you are for limit increases.
❌️ Higher APRs: Typically, credit builder cards have a higher Annual Percentage Rate (APR) than other credit cards to help lenders reduce the risk of losing money if you can't repay them.
Best Credit Cards for No Credit History — Reviews
Here are 7 best credit cards for no credit history:
1. Tesco Bank Foundation Credit Card
Tesco Bank Foundation Credit Card
Credit Limit
Representative % APR (variable)
29.9% APR
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Collect Clubcard points almost every time you shop.
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Credit limit £250 to £1,500.
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Access to Tesco Bank CreditView, provided by TransUnion, for 3 years from account opening.
Representative Example – If you spend £1,200 at a purchase interest rate of 29.9% p.a. (variable) your representative APR will be 29.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.
- Credit limit: £250 – £1,500
- Minimum repayment: £25
- APR: 29.9% variable
Representative Example — If you spend £1,200 at a purchase interest rate of 29.9% p.a. (variable), your representative APR will be 29.9% APR (variable) with no annual fee. Your APR and credit limit may vary depending on your circumstances.
The Tesco Foundation Credit Card is ideal for improving your credit profile; it was voted the best credit builder card in 2021. With this credit card, you'll receive a credit limit between £250 and £1,500. If you display good card management, continuously stay within your limit, and make repayments on time and in full, you may be considered for regular credit limit increases.
When you get a Tesco credit card, you'll gain access to Tesco Bank CreditView, a credit reference agency provided by TransUnion, and it helps you track your credit score with monthly updates.
On top of helping you build your credit report, you can collect Clubcard by simply using your credit card. If you already shop at Tesco and have a Clubcard, you can earn an additional five points for every £4 spent at Tesco as well as your usual points. Your credit card also allows you to earn points in other shops; you earn one point for every £8 spent outside of Tesco.
Tesco has an eligibility checker on their website you can use to see if you'll be accepted without worrying about harm to your credit score.
2. Barclaycard Forward Card
Barclaycard Forward Card
Credit Limit
Minimum £50
Representative % APR (variable)
33.9% APR
-
0% interest on purchases for 3 months (from the date you open your account).
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Credit limit £50 to £1,200.
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Minimum repayment £5.
Representative Example – If you spend £1,200 at a purchase interest rate of 33.9% p.a. (variable) your representative APR will be 33.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.
- Credit limit: £50 – £1,200
- Minimum repayment: £5
- APR: 33.9% variable
Representative Example — If you spend £1,200 at a purchase interest rate of 33.9% p.a. (variable), your representative APR will be 33.9% APR (variable) with no annual fee. Your APR and credit limit may vary depending on your circumstances.
The Barclaycard Forward Card gives you a personalised credit limit based on your credit history, and each application is independently assessed to determine credit limits and APR rates. If you make all your payments on time for the first year, you'll receive a 3% interest rate reduction. You can purchase with 0% interest for the first three months of opening the account.
To help build credit, you can manage your account with handy alerts via text or email to inform you when your balance is due and to help you stay on top of spending.
An additional perk of using this credit card is that you'll gain access to five months free of Apple subscriptions, so if you're an iOS user, you can use AppleTV+, Apple Music, Apple Fitness+ and more. If free Apple subscriptions weren't enticing enough, you'd also gain access to Barclaycard Entertainment and low fees for using your card abroad.
To be eligible for this credit builder card, you must have an annual income of at least £3,000, haven't declared bankruptcy in the past six months, and have no more than one County Court Judgements (CCJs). You can use the free online eligibility checker before you apply to find out if you'll be accepted.
3. HSBC Classic Credit Card
HSBC Classic Credit Card
Credit Limit
Minimum £250
Representative % APR (variable)
29.9% APR
-
Interest-free period up to 56 days each billing period for cleared balances.
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Credit limit up to £1,000 (subject to status).
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No annual fee.
Representative Example – If you spend £1,000 at a purchase interest rate of 29.9% p.a. (variable) your representative APR will be 29.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.
- Credit limit: up to £1,000
- Minimum repayment: 1% of the balance used
- APR: 29.9% variable
Representative Example — If you spend £1,000 at a purchase interest rate of 29.9% p.a. (variable), your representative APR will be 29.9% APR (variable) with no annual fee. Your APR and credit limit may vary depending on your circumstances.
The HSBC Classic Credit Card is designed to build and boost your credit rating, with a credit limit set depending on your personal circumstances. You can safely manage your card and account with online banking or the Mobile Banking app to check your balance, make payments, or freeze your card.
With this credit card, you'll access exclusive offers and discounts with HSBC home&away to save on shopping, eating out, travel, family days out and more. There are regular updates on offers available to you, and if you're travelling, you can search for offers by your location.
To be eligible for this credit card, you must hold an active HSBC current account (excluding Basic Bank Account) and have an annual income, or pension, of £6,800 before tax.
4. Aqua Classic Credit Card
Aqua Classic Credit Card
Credit Limit
Minimum £250
Representative % APR (variable)
34.9% APR
-
Smart credit limits from £250 – £1,200.
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Build better credit with expert support in the Aqua app.
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Ability to build your credit score, if you manage your account well.
Representative Example – If you spend £1,200 at a purchase interest rate of 34.9% p.a. (variable) your representative APR will be 34.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.
- Credit limit: £250 – £1,200
- Minimum repayment: 1% – 3.25% of used balance
- APR: 34.9% variable
Representative Example — If you spend £1,200 at a purchase interest rate of 34.9% p.a. (variable), your representative APR will be 34.9% APR (variable) with no annual fee. Your APR and credit limit may vary depending on your circumstances.
The Aqua Classic Credit Card allows up to 48 days of interest-free purchases if you pay your balance in full monthly and on time. Credit limits start from £250 up to £1,200. However, the more you use your card and Aqua becomes familiar with you and your spending habits, it can be increased.
Aqua offers excellent support for credit building; whether you've bad credit or no credit, Aqua supports changing that. You'll gain free access to your credit score via the Aqua app, and you can receive expert support from Aqua Coach, who will give you hints and tips to help money management and improve your credit score.
To be eligible for this credit card, you must have a UK bank account and no bankruptcies or CCJs on your credit record. Additionally, your application may be rejected if you already have an Aqua, Marbles, Opus, Fluid or Bip card.
5. Asda Money Select Credit Card
Asda Money Select Credit Card
Credit Limit
Minimum £250
Representative % APR (variable)
34.9% APR
-
Cashback 0.3-1%.
-
Earn Asda Rewards when you spend.
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No annual fee.
Representative Example – If you spend £1,200 at a purchase interest rate of 34.9% p.a. (variable) your representative APR will be 34.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.
- Credit limit: £250 – £5,000
- Minimum repayment: 2.2% of outstanding balance plus interest
- APR: 34.9% variable
Representative Example — If you spend £1,200 at a purchase interest rate of 34.9% p.a. (variable), your representative APR will be 34.9% APR (variable) with no annual fee. Your APR and credit limit may vary depending on your circumstances.
You can earn cashback in the form of Asda Pounds with the Asda Money Select Credit Card. You can earn 1% of your Asda shopping spend back in Asda pounds and 0.3% back on spending elsewhere.
You can earn up to £50 extra with 5% of your Asda purchases within the first 90 days of opening your account. You can use your Asda Pounds to get money off your weekly or monthly shop. You can also earn additional Asda Rewards when you use your credit card to purchase when registering for Asda Rewards.
From the Asda Money Credit Card app, you can control your finances on the go. You can set up and manage a direct debit to ensure you make your repayments on time.
6. TSB Student Credit Card
TSB Student Credit Card
Credit Limit
Minimum £500
Representative % APR (variable)
21.9% APR
-
Interest-free period up to 56 days on purchases each billing period for cleared balances.
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Credit limit £500 to £1,000 (subject to status).
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No annual account fees.
Representative Example – If you spend £1,000 at a purchase interest rate of 21.95% p.a. (variable) your representative APR will be 21.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.
- Credit limit: £500 – £1,000
- Minimum repayment: £5
- APR: 21.9% variable
Representative Example — If you spend £1,200 at a purchase interest rate of 21.95% p.a. (variable), your representative APR will be 21.9% APR (variable) with no annual fee. Your APR and credit limit may vary depending on your circumstances.
If you're a student looking for your first credit card, consider a TSB Student Credit Card. You can start building your credit score alongside your studies with this card.
You won't have to pay interest on purchases if you pay the balance in full and on time. This card is ideal for students who have never taken out credit before. Credit limits are personalised to reduce the risk of overspending and getting into debt.
To be eligible for this credit card, you must have had a TSB Student Current Account for at least three months before the credit card application. Additionally, there have to be no No bankruptcies declared or CCJs on your credit report. You'll also need to have a regular income to ensure you can repay the balance.
7. Capital One Classic Credit Card
Capital One Classic Credit Card
Credit Limit
Minimum £200
Representative % APR (variable)
34.9% APR
-
For people with bad credit or building credit.
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Credit limit £200 to £1,500.
-
Minimum repayment £5.
Representative Example – If you spend £1,200 at a purchase interest rate of 34.94% p.a. (variable) your representative APR will be 34.9% APR (variable). Your APR and credit limit may vary depending on your circumstances.
- Credit limit: £200 – £1,500
- Minimum repayment: £5
- APR: 34.9% variable
Representative Example — If you spend £1,200 at a purchase interest rate of 34.94% p.a. (variable), your representative APR will be 34.9% APR (variable) with no annual fee. Your APR and credit limit may vary depending on your circumstances.
The Capital One Classic credit card is designed for people looking to build credit. The credit limit is personalised to your financial history. With good card management, you can benefit from up to two optional credit limit increases per year. Additionally, you can earn APR reductions if you demonstrate good card management.
You need some credit history to be eligible for this credit card, even if it includes CCJs or defaults. If you've used an arranged overdraft in the past and paid it back successfully, this will show on your credit report.
Being registered on the electoral roll will increase your chances of being accepted. You can use Capital One's free QuickCheck feature to see if your application will likely be accepted without harming your credit score.
Leading Credit Cards for No or Poor Credit History: The Verdict
Now that you know which credit cards help remedy bad credit, you can create a favourable credit record to help enhance your future credit applications.
If you want to boost your credit score that little bit more, there are other approaches you can take on top of using your credit builder card:
- Register on the electoral roll: Registering on the electoral roll at the most recent address you're living at helps companies confirm your identity.
- Keep credit utilisation low: Having multiple credit cards and financial commitments can harm your credit score. You can avoid high credit utilisation by closing any unused accounts.
- Minimum monthly repayments: Always make the minimum repayment to avoid paying interest and stay on top of borrowed money. Missed repayments can further harm your credit score.
- Apply to one card at a time: Every time you fill out a credit application, it leaves a mark on your credit file and can temporarily harm your credit score. It's best to apply for a credit one at a time to avoid multiple marks.
- Eligibility check: To avoid your credit card application from being rejected, always check if the credit card provider has an eligibility checker. You can find out if you're likely to be accepted, so it saves you time and doesn't affect credit scores.
- Avoid cash withdrawals: Taking cash from your credit card can get expensive. Most credit card providers charge fees for cash withdrawals, and you'll accrue interest daily on the amount you take out.
With one of our list's top credit builder cards and the above tips, you're one step closer to going from bad credit to excellent.
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