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credit-building

Choosing Your First Credit Card in the UK, Including Credit-Builder Cards

By PointsExplainedLast reviewed

Check your credit reports first

Request your free statutory reports from Equifax, Experian and TransUnion and correct any mistakes before you apply. Our guide to UK credit reports explains how.

Register to vote at your current address

Experian says electoral roll information helps lenders confirm your name and address.

Use soft-search eligibility checkers

Compare your chances across several cards without leaving hard searches, then apply for the one you are most likely to be accepted for.

Automate at least the minimum, aim for the full balance

Set up an automated repayment on day one. Paying the full statement balance avoids interest and builds the on-time record lenders look for.

Where this comes from

Sources

The documents this guide relies on. If one has changed since we read it, the document is right and this guide is out of date.

  1. FCA Handbook CONC 5.2A: Creditworthiness assessment

    Firms must make a reasonable creditworthiness assessment before entering into a regulated credit agreement or significantly increasing a credit limit, with proper regard to affordability risk (CONC 5.2A.4R, 5.2A.5R).

    handbook.fca.org.uk · Accessed
  2. Experian: How to improve your credit score

    Thin files are common if young, new to the UK or not borrowed before; credit-builder cards usually have low limits and high interest rates; use a small amount and repay on time and in full; score may briefly drop on a new card; keep utilisation below 30% if possible; electoral roll helps lenders confirm name and address; lenders calculate their own scores.

    experian.co.uk · Accessed
  3. Experian: Searches on your report - soft and hard credit checks

    Soft searches are visible only to you and do not affect your score; hard searches are visible to lenders; many applications in a short period can concern lenders.

    experian.co.uk · Accessed
  4. Barclaycard: What is a balance transfer and how does it work?

    Barclaycard's eligibility checker will not affect your ability to apply elsewhere; terms offered depend on financial circumstances and borrowing history.

    barclaycard.co.uk · Accessed
  5. FCA Handbook Glossary: representative APR

    Representative APR is an APR at or below which the firm reasonably expects at least 51% of agreements resulting from the promotion to be made.

    handbook.fca.org.uk · Accessed
  6. FCA Handbook CONC 3.5: Financial promotions and representative examples

    Promotions indicating a rate or cost of credit must include a representative example including the representative APR (CONC 3.5.3R, 3.5.5R).

    handbook.fca.org.uk · Accessed
  7. Consumer Credit (Disclosure of Information) Regulations 2010, regulation 3 (legislation.gov.uk)

    Pre-contract credit information must be disclosed in good time and includes interest rates for each rate, the APR, repayments and their allocation order, and charges.

    legislation.gov.uk · Accessed
  8. Consumer Credit Act 1974, section 66A (legislation.gov.uk)

    14-day right to withdraw from a regulated consumer credit agreement without reason, counted from the day after the latest of: agreement made, credit limit notified, copy of agreement received (s.66A(2)-(3)); repay credit and interest within 30 days of notice (s.66A(9)-(10)); no other fees or compensation except non-returnable charges paid to a public administrative body (s.66A(9)(b)).

    legislation.gov.uk · Accessed
  9. FCA Handbook CONC 6.7: Post-contract business practices

    Option to pay any amount at or above the minimum by automated repayment (CONC 6.7.6R); credit-limit increase rules: not where customer declined increases or is at risk of financial difficulties (6.7.7R), right to reduce/decline and opt out (6.7.8R), 30 days' notice for credit cards (6.7.9R).

    handbook.fca.org.uk · Accessed
Questions

About this guide

Will a credit-builder card definitely improve my credit score?

No card guarantees it. Experian says a credit-builder card can help if you use a small amount and repay on time and in full every month, but missed payments, high balances or frequent applications can harm your score.

Can I cancel a new credit card if I change my mind?

Yes. Under section 66A of the Consumer Credit Act 1974 you have 14 days to withdraw without giving a reason. You must repay anything you have borrowed, plus interest at the agreement rate, within 30 days of giving notice.

Will I get the representative APR?

Not necessarily. The lender must expect at least 51% of the agreements resulting from an advert to be at the representative APR or less, so some applicants may be offered a higher rate.
Keep reading

Balance Transfers, Card Instalment Plans and Buy Now Pay Later in the UK

UK Credit Card Fees Explained and How to Avoid Them

Credit Card Interest, Minimum Payments and Representative APR in the UK