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Improve your credit score with credit repair cards

Improve your credit score with credit repair cards

Category: Credit cards

Updated: 02/05/2017
First Published: 02/05/2017

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Consumers may well be benefiting from a reduction to the cost of borrowing at present, with our data showing that there are plenty of enticing interest free credit cards available in the credit card market.

However, this won't help those who have a poor credit score, or who have already fallen into problem debt - either one of these could easily scupper your chances of being able to take advantage of these lucrative credit cards. Luckily there's an alternative for those looking to improve their credit score.

How to improve your credit score

Not every borrower will be eligible for the best deals, but help is at hand for those with a poor credit rating, in the form of credit repair cards. These cards can help a whole range of people: those with little income, who are self-employed and unable to prove a regular income, who either have no credit history or a poor one, even those with CCJs or who have been turned down for credit in the past, may find credit repair cards a great alternative.

This is for the simple reason that you don't need a decent score to be accepted - their whole point is to help you get a better one, and you do that by proving you're a responsible borrower who can pay back what they owe.

Below is a list of some of the best credit repair cards available, any one of which could be a great solution for those who need to build up their score.

Lower Rate Balance Transfers Rewards Reducing Rate
Selection of credit repair card deals (APR for purchases) Metro Bank
Personal Credit Card MasterCard
(13.0% APR)
Barclaycard
Platinum 18 Month Balance Transfer Visa
(24.9% APR)
Tesco Bank
Foundation Clubcard Credit Card MasterCard
(27.5% APR)
NewDay Ltd
aqua Advance MasterCard
(34.9% APR)


"Credit repair cards might look frightening from the outset, since many charge higher interest rates than standard credit cards," said Rachel Springall, finance expert at Moneyfacts.co.uk. "However, if used appropriately, they really can make a difference to those hoping to borrow and build their credit score, and who are otherwise running out of options.

"These cards typically offer a low credit limit to start with, which can be increased if a borrower uses the card wisely; the simplicity of credit repair cards could save consumers from overspending and help them focus on repaying what they borrow more quickly. Not only this, but borrowers may be more inclined to repay their debt on a card that charges interest versus an interest-free card that can be forgotten about for many months."

Find the best deals

However, as with any credit card, it's important to remember that not all credit repair versions are the same - which is why you need to do your research and compare the top deals to find the best option for you.

For example, some like Metro Bank can offer a lower rate, while Barclaycard can offer an 18-month interest-free period for balance transfers and a three-month 0% purchase offer, and Tesco Bank will allow customers to earn Clubcard points when they spend. Then there's the aqua Advance credit card - those who borrow and repay on time could find that the rate is reduced to just 19.9% APR and the credit limit increased to £1,200.

Whichever card you pick, just make sure to use it wisely: "As a rule, consumers should avoid drawing cash with these cards due to their high interest, which could be over 40% per year," cautions Rachel.

"If consumers are wary of taking out a credit card, they could instead consider opting for a prepaid card to better manage their outgoings. For example, Pockit has a prepaid MasterCard which pays up to 10% cashback on a small 99p issue fee, and could be used as a second bank account to manage everyday spending by setting a limit on the amount of cash that can be debited from the account.

"In the UK, there are thousands of consumers seeking debt advice [according to a study by the StepChange Debt Charity from March 2017], and this number is likely to keep growing if customers are unable to take control of their debts and improve their credit score. It's clear to see why credit repair cards are an important part of the market and should be taken seriously."

What next?

Check your credit rating to see it you need to improve it. If so, compare the best credit repair cards to start rebuilding your score.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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