If there’s one thing we hate, it’s giving out bad news. However, if you’re currently thinking about applying for a credit card with the hope of avoiding a credit check, we’ve got to stop you right now. Why? Because they don’t exist! While some loan providers and lenders may offer loans that can be approved without the need for a credit check, the same can’t be said for credit card providers – ALL of them required a credit check to be carried out, meaning that if you’ve got a bad credit rating or County Court Judgement (CCJ), you might struggle to be approved for one.
However, there are alternatives that might be more suitable. The most obvious is a pre-paid card, which is essentially the credit card equivalent of a pay-as-you-go mobile phone. Granted, you actually need the cash to put on it initially before you can start spending, but getting one is as simple as finding a high-street store that sells them (for instance, newsagents like McColl’s/Martin’s) so there’s no need for a credit check. What’s more, because you have to pre-load them with money, it’s impossible to go over your limit and therefore get further into debt – they can also be used to withdraw cash from hole-in-the-wall cashpoints and even work abroad, meaning they’re incredibly useful if you’re going on holiday but don’t want to take cash (which is easily stolen) or don’t want the freedom to accidentally overspend on a card.
Some pre-paid credit cards can also help repair your credit rating over time, though they need to be applied for through more conventional routes with lenders and usually have monthly usage fees attached. Providing you keep up the monthly repayments though, they can prove to other lenders that you can handle money responsibly, potentially opening the door to more traditional forms of credit further down the road.
Beyond that, the only other option on the credit card front – aside from a ‘big name’ credit card that you might not be accepted for, of course – would be a card created especially for people with bad credit. There are only a select few companies that offer such cards (specifically Capital One, Vanquis and Aqua) and they have some of the highest interest rates around, ranging as they do between 35 and 40% APR (Annual Percentage Rate). However, responsible use can help pull your credit rating up so they’re worth considering if your options really are limited.
The best thing to do before you apply for any kind of credit card, of course, would be to get a copy of your credit report from one of the three major credit reference agencies that keep them – Experian, Equifax or CallCredit. It only costs £2 to get it and is well worth checking to not only see how likely you are to be accepted for a credit card or loan, but also to check for errors that might be holding your credit rating down unfairly.
No Credit Check Credit Cards…
- Don’t actually exist!
- Have alternatives, such as pre-paid cards that you pre-load with money
- May not be available, but credit cards designed for people with bad credit are!
- Apply for a credit report first to see if you’d be eligible for a ‘regular’ credit card