Credit Building Cards
Looking to build your credit score? Compare credit cards today
Having no credit history is sometimes referred to as having a 'thin' credit file. If you're looking to improve your credit score, a credit builder credit card could be a suitable option for you. Compare credit builder credit cards for free today, with no impact to your credit score.*
We are a credit broker, not a lender.
How does a credit builder credit card work?
When used responsibly in addition to other credit-building methods, a credit builder credit card could help boost your credit score. Here's how it works.
Use your credit builder credit card to make small, manageable purchases, staying well within your credit limit.
You must make at least the minimum repayment amount due on your balance each month. If you repay your balance in full and on time each month, you could avoid interest charges on your spending.
Your repayment history will be reported to the Credit Reference Agencies, such as Experian, Equifax, and TransUnion UK. In time, you could see an improvement to your credit score.
Things to think about when comparing credit builder credit cards
There are several factors to consider when searching for the credit builder credit card that suits you and your circumstances.
Representative Annual Percentage Rate
(Rep. APR)
The Representative APR for a credit product shows you the overall annual cost of borrowing, including interest and any standard annual fee. The Representative APR is the rate that is offered to at least 51% of people who are accepted for that particular credit product. The actual APR you could be offered is personal to you, however; it could be higher or lower than the figure stated.
Credit limit
The credit limit is the maximum amount of money that you can borrow on your card. Credit builder credit cards generally come with low credit limits to help users keep on top of their repayments and manage their finances with confidence. Remember, when using a credit card, you should never spend more money than you can afford to repay.
If you're aiming to improve your credit score, you will want to keep track of your credit utilisation. This is the difference between your credit card limit and your credit card balance and is usually expressed as a percentage. The lower your credit utilisation, the greater the chance of improving your credit score.
Additional fees and charges
Some credit cards come with additional charges, such as fees for making late repayments or withdrawing money from a cash machine. Always read the terms and conditions of your credit card account carefully so you are aware of any fees you could be charged.
Who can compare credit builder credit cards?
You can use Compare Credit Cards to search for a credit builder credit card if you:
- Are over the age of 18;
- Are a UK resident;
- Have three years' worth of UK address history;
- Have a UK bank account with a valid debit card;
- Have a regular income paid into your UK bank account; and
- Have a minimum annual income of £5,000.
How to compare credit builder credit cards
Searching for the right credit card can be time-consuming and confusing. This is where we could step in and help. Compare Credit Cards has access to a range of providers, and we do exactly as our name suggests. What's more, our service is completely free to use.
Here's what you can expect from the Compare Credit Cards journey:
Enter your details into our eligibility checker; this should take no longer than five minutes to complete.
Once you've submitted your information, we'll run a soft search and check our range of providers for credit cards to suit your needs. This stage should take around 60 seconds.
If we've been successful in matching you with one or more credit cards, your options will be displayed on your screen.
We'll also provide some useful information about each credit card. This will include the Representative APR or, in some cases, the interest rate you will be charged if you are accepted for that credit card; the standard annual account fee (if applicable); as well as your chance of approval.
Found a credit card you like the look of? You can click through to the provider's website where you can decide whether this is the right product for you. Please be aware that if you decide to make a full application, you'll be required to undergo a hard credit search with the credit card provider.
If you pass the provider's checks, you will be sent a credit card agreement, which you should take the time to read through carefully. If you're happy with the terms and conditions, you can sign and return it. The provider will be able to let you know when to expect your credit card.
Other ways to improve your credit score
While having a thin credit file can feel daunting, the good news is that you can take the first steps towards a better credit score today.
- Ensure all your bills and any current credit commitments are paid on time.
- Register to vote. Being on the electoral roll will make it easier for potential providers to identify you at your current address.
- Check your credit report for errors and flag any discrepancies with your credit reporting agency.
- If you have a credit card, avoid using it to withdraw money from a cash machine. This is known as a cash advance, which lenders and credit card providers could perceive as poor money management.
- When you apply for credit directly with a provider, you'll be required to undergo a hard credit search. Too many hard searches within a short period of time could have a negative impact on your credit score. Try to limit the number of hard searches undertaken
- When using any existing credit cards, be sure to stay well within your credit limit.
Why is it important to have a good credit score?
If you need to apply for credit, having a good credit score could mean that you're eligible for a wider range of borrowing options and more desirable rates of interest. Having poor or no credit history may result in borrowing restrictions; for example, your application may be declined or, if you are approved, you may not be able to borrow as much money as you need to.
Frequently Asked Questions
If you make your credit builder credit card repayments on time each month, stay well within your credit limit, and adopt other credit-building habits, you could possibly notice an improvement to your credit score after several months.
You're welcome to check your eligibility at Compare Credit Cards, even if you have no credit history.
Having no credit history may also be referred to having a 'thin' credit file and is common in those who have never paid bills or borrowed before.
Over time, a credit builder credit card could help you establish and build your credit score.
Credit builder credit cards tend to come with a relatively low starting credit limit to encourage responsible spending. If successful, your credit card provider will confirm your personal credit limit.
Late and missed repayments could result in additional fees and charges, as well as a decline to your credit score.
If you're struggling to make your repayments, you should contact your provider as soon as you can. They will be able to talk you through any options that might be available to help ease the pressure.
We're sorry to hear that you're experiencing money worries. Please know that you can access free advice through charities and organisations such as StepChange, MoneyHelper, National Debtline, and Citizens Advice.
Digitonomy Limited trading as Compare Credit Cards is not a lender but is a fully regulated and authorised credit broker which introduces borrowers and lenders for the purposes of entering into consumer credit agreements.
Compare Credit Cards does not charge customers a fee for using its broker services, but it receives a commission from lenders or other brokers if a customer enters into a consumer credit agreement with a lender or broker following an introduction through this website.
Compare Credit Cards will provide every effort to present you with Credit Cards you may be eligible for. If we are not able to do this, we may present you with alternative credit products. You are under no obligation to proceed with these if you feel they are not suitable for your circumstances.
Compare Credit Cards is a registered Trading Name of Digitonomy Limited, Registered in England and Wales (Company number 08385135), Registered Office; Steam Mill Business Centre, Steam Mill Street, Chester, Cheshire, CH3 5AN. Digitonomy Limited is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register under reference number: 690249. Licenced by the Information Commissioners Office, (registration number ZA007309).
Our service is available to over-18s only, subject to status, UK residents only © Compare Credit Cards 2024