Applying for a credit card options can be a difficult and stressful process if you have a bad credit score, but it’s not impossible. If you think you might have bad credit and are looking for a credit card, it’s important to compare all of your options and do your research first, especially when it comes to your credit score.
This can help ensure you get the most competitive product possible and that it doesn’t negatively affect your credit score. If you think you have a bad credit score in Australia, here’s what you need to know to get a credit card.
Can I get a credit card with bad credit?
Yes, but it can be a difficult process as it depends on the eligibility criteria of each credit card provider. Since your credit file is reviewed every time you apply for a credit card, a bad credit score can affect your chances and complicate the process.
In Australia, it is currently not possible to obtain a credit card from a low-risk provider without a credit check. However, there are no “no credit check” providers, also known as payday lenders. While this may seem inconvenient, it’s in your best interest if you have bad credit. If you are turned down by a credit card provider, it can negatively affect your credit score. Applying for a credit card when you have bad credit and then being turned down can make things worse.
Instead, you can look for lenders or platforms that do “soft” checks (pre-qualifications that show your chance of approval) that won’t show up on your credit history, and try to apply for the credit cards that best fit your financial situation.
How can I get a credit card options with bad credit?
To help improve your chances of being approved and reduce your risk of negatively affecting your credit score, you should use a comparison tool to find the right credit card for your financial situation, that is, for low-income people, people with poor credit and more.
RateCity.com.au’s credit card comparison table allows you to search, filter and compare competitive credit card options for people with bad credit. Use this tool to research credit card interest rates, as well as read product reviews, who a credit card is right for, and what the minimum income requirements might be.
Who offers bad credit credit cards with guaranteed approval?
It is impossible to get a guaranteed approval in Australia and there is no uniform definition of bad credit. Each lender has its own credit scoring criteria and how to determine your eligibility and chances of approval. When applying for a credit card with bad credit, there are a few things you can do to improve your chances of being approved.
Pay your debts
When creditors review your credit card application, they will review your payment history on any other cards or loans you have. If you can show that you have been making your payments and have made more than the minimum monthly credit card payments, you are more likely to improve your credit score and be approved as a result. If you have multiple sources of debt (personal loans, credit cards, etc.), you should focus on one debt at a time and budget to pay off the debt.
Once you know how much you owe, you should set aside the money and pay it off one at a time, starting with the debt with the highest interest rate. If you have excess cash at the end of your payment cycle, include that in debt as well.
Check your credit history
It is not uncommon for credit reports to contain errors. One of the most common mistakes can involve a family member or stranger with a name very similar to yours billing you for a debt in your name. You can also add positive information to your credit report to show the stability of your personal and financial life, such as working full time, being married, owning a home, and living at the same address for several years.
Working to clear your bad credit rating can make the credit card application process easier in the future.
Lenders will review your bank statements to determine your eligibility, so if you can show that you have some savings, you’re showing that you can stick to a budget and have control over your finances.