Best first credit card: credit history 101

julia kukiewicz
By Julia Kukiewicz

first credit card application

Never had a credit card before? Never fear.

For some years now, the 'credit crunch' has continued to bite and it's bitten hardest for those with very little credit history.

But, with a bit of know-how, there are still plenty of options for those looking to get their first credit card.

Credit history boys (and girls)

The central problem for those looking for their first credit card is generally held to be a lack of credit history.

However, those looking for a first credit card are often not as green as they think.

Credit history doesn't mean just credit cards, mortgages and loans but any longstanding agreement between a consumer and a business that will show up on a report from a reference agency.

More casual borrowing relationships such as overdrafts are increasingly taken into account and so are mobile phone contracts, home broadband subscriptions and the like.

Credit card providers use all of these as a measure of an individual's success with managing credit commitments and, to a lesser extent, as a measure of stability.

Other indicators of stability important both to those new to credit and to old hands include: electoral roll registration, to make it easy for providers to confirm personal information is correct; consistent address information, for the same reason, and salary or savings.

All in all, then, it's a mistake to think of credit history as a fixed rating or a concrete thing, as if a good history is something you either have or don't. All credit card providers have different ways of assessing applicants, as we'll see in the next section.

Getting started

Rather than focusing solely on credit history, then, first time credit card applicants can increase their chance of a successful application by considering the type of credit card they're looking for.

The most eye-catching deals - the longest 0% offers or best deals on cash back - are likely to be out of initial holders' grasp but variations on these - loyalty cards, shorter 0% deals - are often available.

For first time applicants, as with all credit card applicants, the important point is finding a specific function that will be useful and then using the credit card as a tool for that purpose.

That's why our main credit card comparison tool has a 'filter by' option based on the main feature of the card.

As we said above, the main intended use might be collecting rewards or borrowing interest free with a 0% deal but, as we'll see below, perhaps the most frequently cited 'main use' is building or rebuilding credit history, essentially borrowing for the purposes of getting a better borrowing product in the future.

Making applications

At the point of making applications, then, first time credit card applicants should have a good idea of the type of credit card they want.

Now it's time for them to see whether credit card providers want them: how can they tell?

Many credit card providers only advertise to those with 'good to excellent' credit profiles. However, the following providers do advertise 'poor credit or new to credit' products:

These rebuilding cards generally have limited if any 0% introductory offers and rewards, and only minor extra consumer protection such as purchase delivery insurance (more on what that is here) or a fraud guarantee.

Their purpose is often just to be a first credit card.

However, that is not the same as the card being guaranteed: there are still application criteria and, in fact, it's vital that applicants meet and, ideally, exceed application criteria at the time of their application.

So, for example, in the table below you can see three of these cards and a 'suitable for' column of application criteria.

Suitable for
barclaycard initialBarclaycard Initial
Poor credit history or new to credit (suitable if your financial situation has improved over the last 12 months, even if you have missed payments or have had CCJs in the past)
Representative example: When you spend £1,200 at a purchase rate of 34.9% p.a. (variable), your representative APR will be 34.9% APR (variable).
aqua classicaqua classic
Poor credit history or new to credit. (Previous CCJ's accepted, low incomes, recently moved or not on electoral roll, or new to UK).
Representative example: When you spend £1,200 at a purchase rate of 35.95% p.a. (variable), your representative APR will be 35.9% APR (variable).

For more options see our main table here and select the 'credit building' option.

As you can see, some providers are quite specific about past history, some less so.

Other factors, aside from these advertised criteria, can also play a role in whether an application is accepted.

Applicants with an established relationship with a bank, as a current account customer, for example, might have a stronger application because the provider will hold more verified personal information.

As we've said above, however, getting a card that suits the intended use should be the most important factor driving an application.

After application

Finally, let's take a quick look at what happens after a credit card application.

Most first time credit card applicants will have to wait for their request for a card to be assessed. Check here for how long an application can take.

Acceptance: Once accepted, first time applicants should be as careful as any other cardholder that they manage their account well.

In the first instance, that should mean setting up a direct debit to ensure that the minimum repayment is made to the credit card every month.

Rejection: However, be aware that a fairly high proportion of applications are rejected by providers.

If an application is rejected you have the right to ask the provider why you weren't accepted. If the rejection occurred because of information in a credit reference agency file, you're also entitled to know which agency that was.

It's also worth noting that lenders can see credit searches carried out when you make a credit card application and that these can negatively affect future applications.

For this reason, those with rejected applications can increase their chances of having an application accepted in the future by waiting at least three months between applications, it may also be worth using this time to look at other ways to improve a credit rating first.

We've listed some strategies for improving a credit rating in this guide, we also look at how credit cards themselves can help to strengthen a credit report here.

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