Your credit report and score are not the only factors that might be stopping you from getting the best credit cards available
If you have recently applied for a credit card and had your application rejected, then it’s best to avoid immediately applying for another one.
Finding the best credit cards is not easy, and there is no real ‘best credit card’, only what is right for you and your individual financial circumstances.
What are the best credit cards?
While there is no single best credit card out there that you should be applying for, there are some credit cards that are better suited to you than others.
When applying for a credit card or any other type of loan or banking product, first assess whether it’s something you need in order to get by or something that may give you a little more flexibility in the day-to-day management of your finances.
If it is something you need just to get by and keep afloat, then seriously consider all of your other options before taking out any type of credit. Read our guides to debt management to see what options are available to you.
When managed carefully and with a budget in mind, a credit card can be a useful tool in your financial armoury, but it can also lead to debts going beyond your control when you don’t have a proper plan in place for how you will use it.
The best credit card for you is one that can suit your financial goals and give you the best value for that.
For example, if you have a bad credit history and are struggling to be accepted for any loan application as a result, a credit builder credit card, otherwise known as a bad credit credit card could be the best credit card for you.
Bad credit credit card issuers are more likely to accept someone’s application even if they have been declined in the past or have a negative mark on their credit report.
These credit cards usually come with a higher APR – the rate of interest you would need to pay – and a relatively low spending limit, because the risk is higher for the issuer.
Therefore a credit builder credit card would not be good value for someone with a good credit score and a high amount of disposable income.
Another example: if you were regularly going abroad and had enough income to pay off your credit card debts in full and on time, then a travel abroad credit card or airmiles credit card might be an option worth considering.
This way you could collect points to reward yourself with in future.
Ultimately, finding the best credit card is all about assessing a combination of your credit report and score, and your financial goals and aspirations, while weighing it up against how much you can afford to borrow month to month without going into debt.
How does my credit report work?
When you apply for a credit card, and most other financial products, you leave behind a ‘footprint’, which is recorded on your credit report.
Your credit report will show the credit card issuer, and other future potential lenders a history of your financial product applications, as well as your past credit repayments.
This means that if you failed to pay, say, your mobile phone bill on time or missed a credit card repayment, it will show up on your credit report.
Similarly, if you have paid back any debts, that too will show up on your credit report.
All of these factors, plus a few other lesser-known points explained below, contribute to your total credit score.
What is my credit score?
You credit score is unique to you but each credit checking agency has their own scoring system, so your score at each company might be different.
However, the methods for calculating a good credit score or a bad credit score at all of the credit checking agencies are very similar.
So, just because your score might be lower at one credit reference agency that does not necessarily mean it will give you a better chance of being approved for a credit card.
Your credit score will usually be accompanied with a key to explain what the number means, so that you know how good or bad it is, and also what to do to improve it.
Ultimately, improving your financial footprint is the key to getting a better credit score.
How do I check my credit report?
The three main credit reference agencies in the UK are Experian, Equifax and Call Credit. There are several smaller companies that offer credit reports but they usually offers this by getting access to your credit report via the three main agencies.
You can compare credit reports using our tables here.
Many of the credit report products available offer customers a free trial to give users a quick glimpse of their credit report and score.
For some people this is enough for them to work out what’s on there and make the necessary changes to their financial habits.
However, the benefits of subscribing to a credit report product could prove useful in the long run.
Some credit reference agencies do fraud checks, notifying you when your name or any other key personal information is displayed online or has been used in any suspicious looking applications.
As standard, you should also expect to get regular updates whenever any information has changed on your credit report, i.e. when an application has been made, or a repayment has been missed.
What can I do to get the best credit cards?
First and foremost, it’s important to clear all of your outstanding debts. Missing payments or failing to clear debts is a sign of risk for a potential credit card issuer.
They won’t lend to you if they think you’ll fail to keep up with the credit card repayments.
Secondly, there are other factors that affect your credit rating, such as your fraud risk. Credit card issuers will check this by looking at the address on your application against the one registered on the electoral roll.
If these do not match, then it’s almost certain that you will be rejected for a credit card.
Checking your credit report will show you which address you have registered on the electoral roll.
You can then amend any errors with your listed address by registering to vote and entering the correct address on the voter registration form.
Once you have cleared up any issues on your credit report, you can start looking at the best credit cards for you.
- Credit cards for the unemployed – Credit cards for unemployed people and bad credit are becoming easier to get hold but they often come at a bigger cost
- Credit cards to improve your credit rating – If you have a bad credit rating, you will have a hard time getting a loan, but there are some credit cards available.
- Cashback is being cut back: which cards are safe? We explain why some cardholders are seeing their credit card cashback and rewards scaled back.