Are credit builder cards worth it?

It depends how you go on to use your card. If you’ve struggled accessing credit in the past due to less-than-perfect or thin credit, then getting a credit builder card can help to improve your financial situation. Opting for a credit card to build credit – then managing it responsibly – can help you improve your credit score, putting you in a better position to apply for other products with lower interest rates.

How can I get a credit card with no credit history?

Although you may find it difficult to get accepted for a credit card if you’ve little-to-no credit history, it’s not impossible. There are specialist companies, like Ocean Finance, who offer credit rebuilding credit cards designed to help you access the funds you need so you can start borrowing sensibly. If used responsibly, this should help you build up your credit history over time.

How long does it take to build credit score?

It can take time for your credit score to improve, so if you’ve started to make positive changes, give your score some time to catch up. Often it can depend on how regularly the credit reference agencies update your records, and which lenders report to which agencies. If you are consistently managing your finances well, and taking the necessary steps to improve your credit score , you should see that it starts to improve within a few months.

Can I get a credit builder card with no credit check?

You can see your eligibility for a credit builder card without a credit check – so you can know if it’s a yes with no impact on your score. However, as with any type of credit, a hard check is carried out when you apply for a credit card. You can easily recover this with responsible use of your new card – this means paying on time, every month and staying well within your credit limit.

Are there any alternatives to credit builder cards?

Yes, there are alternatives to credit builder cards. The right one for you will depend on what you’re trying to achieve. Build credit – From adding yourself to the electoral roll, to keeping up with household bills, there are many steps you can take to improve your credit score without a credit card. Access funds – To access funds, you can apply for a loan . You may be able to borrow more with a secured loan , but be aware your home will be used as security. This means if you fall behind on your secured loan or mortgage repayments, your home may be at risk. Personal loans are not secured against your home, but monthly repayments tend to be higher. Consolidate debt – You can move either some or all your debt into one payment with a debt consolidation loan . This can reduce your monthly outgoings but be aware that you may be extending the term and increasing the amount you repay in total.

Can I get a credit builder card with no income?

Although there are lenders who specialise in offering cards to those with lower incomes, all credit cards require you to have a minimum income amount in order to be accepted. The minimum income amount will vary between lenders, and there is no legal minimum income for a credit card. This is to ensure that you can afford to make at least the minimum monthly repayments.

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Intelligent Lending Ltd (credit broker). Capital One is the exclusive lender.

Making payments and staying within your credit limit can help build your credit. Not doing so could harm it.

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The application process was very easy and professionally administrated. I received excellent communication all through the process. Mr Roberts

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What is a credit builder card?

A credit builder is a type of credit card that can help you build (or rebuild) your credit score by showing lenders you’re able to borrow responsibly. If you have poor or thin credit, or have been refused credit in the past, a credit builder card may be right for you.

Credit limits on these cards tend to be lower and more manageable than on mainstream credit cards – but the interest rate is often higher.

How does a credit builder card work?

The better your credit score, the more lenders can trust you’ll repay what you borrow. To build your score using a credit card, you need to borrow responsibly. You can do this by:

1) Spending under a quarter of your credit limit
As the borrowing limit on a credit builder card is typically on the low side, you may need to start with small purchases. After consistent, responsible use, you can ask the lender to increase your credit limit.

2) Making your repayments on time, every time.
Always aim to pay your card back in full each month, as you'll owe interest on any balance remaining. A Direct Debit is useful for keeping up with repayments, it will automatically pay the owed amount from your current account.

After following these steps, you could see your score improve within months. This means when you borrow money in future, like for a mortgage or car finance, you may be able to get a better rate.

Who are credit builder cards for?

You may be eligible for a credit builder card if you have:

Bad credit

If you have:

Missed or late payments to credit providers (like loans and other credit cards)
CCJs (County Court Judgements)
Defaulted accounts
Past IVAs or bankruptcy

A credit builder card can help you show lenders that you’re on top of your finances. This means it can improve your credit score, putting you in a better position to borrow in the future.

Thin or no credit

If you haven’t borrowed much in the past, then you’ll have little-to-no credit history.

This means that lenders can’t see how you manage your finances and are less likely to lend to you.

Using a credit builder card to make small purchases and repaying the amount in full every month can help build your score.

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How to get an Ocean Credit Builder Card

To apply for a credit card, follow our easy step-by-step process:

Check your eligibility - Complete our simple form.
Apply online - Get a yes or no in 60 seconds.
If accepted - You’ll receive your card within 10 days.

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No impact on your credit score

How to build your credit score

Along with responsible use of a credit card, there are other steps you can take to get your credit score in a good place. These include:

Add your name to household bills - ensure your repayments are associated with your credit file.

Pay all bills on time, each month - this shows lenders that you’re a responsible borrower.

Check for mistakes - check your credit report regularly with all three credit reference agencies ensures you can correct any mistakes quickly.

Remove old financial ties - any financial ties could have a negative impact on your credit score, if they have had financial difficulties themselves.

Space out credit applications - use eligibility checkers first to see how likely you are to be accepted.

Once you’ve taken these steps, you can check your credit score for improvements with the three main credit reference agencies. You can check your Equifax report for free (for life) with our member-only platform, CredAbility.

For more ways to build credit, visit our guide on 45 ways to improve your credit score.

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Making and paying off small purchases on a credit builder card can be an effective way of building up a good credit history. Providing they are paid off in full and on time each month, they can improve your credit score and chances of getting better rates in the future.
Zubin Kavarana, Personal Finance Writer