credit scoring

Credit card options for applicants with bad credit

Want to apply for a credit card when you have a bad credit score? Here's what you need to know.

It's difficult to get a credit card in Australia when you have bad credit. Credit card issuers use your credit score and the information on your credit report, as well as your income, employment situation and other factors, to determine your reliability as a borrower. If your credit profile indicates you have trouble repaying loans and credit, you may not be approved for a credit card.

While a bad credit score can have a negative impact on your chances of getting a credit card in the short term, working to improve your credit rating can help increase your chances of getting approved for a credit card in the future.

This guide will take you through what you need to know.

What is my credit score?

Your credit score is a numerical representation of the information on your credit report and helps determine your success when it comes to applying for credit. Currently, there is not a standardised way of calculating credit scores, so the credit rating bodies use their own rating systems. Get your free credit report and credit scoreHere is a breakdown of credit scores and credit score grades from two credit reporting bodies, Equifax and Experian. Note that if you order your credit score and report from finder.com.au (which you can do by following the link above), your information will be delivered by Experian.

Credit bandExperianEquifax
Excellent800-1,000833-1,200
Very good700-799726-832
Good625-699622-725
Fair / Average550-624510-621
Weak / Below average0-5490-509

What credit products can I get with bad credit?

While you may be looking for a credit card, it is difficult to get approved when you already have bad credit. As bad credit rating credit cards and no credit check credit cards aren’t available in Australia, you might need to consider some of the following options:

  • Prepaid travel cards. These travel cards allow you to load up your own funds and then earn reward points on your spend.
  • Debit cards. A good way to avoid debt is to steer away from credit and only spend what you have. Debit cards are debt-proof and widely accepted as payment. But note that using a debit card will have zero effect on your credit report and cannot help you rebuild your credit rating.
  • Prepaid credit cards. Prepaid cards are similar to debit cards in the sense that you’re spending only what you have. Unlike a debit or credit card though, you load funds on the card before using it. These cards also don’t affect your credit rating and don’t charge interest, so they can be a good way to build up your budgeting skills. Most prepaid cards are either Visa or Mastercard, so you should be able to use them in the same places you’d use your credit or debit card.
  • Short term loans. This is a loan of up to $2,000 that has to be repaid between 16 days and 1 year, but usually terms are around 62 days. Keep in mind these loans come with high fees (a 20% establishment fee and a 4% monthly fee) so really consider how much you need it before you apply.
  • Bad credit personal loans. If you're in need of a larger amount than a short term loan, there are some bad credit personal loans available that can offer amounts up to $5,000 or even $10,000. These loans usually come with a flat interest rate and, if you repay responsibly, can be used to rebuild your creditworthiness.

Credit card alternatives for borrowers with a bad credit rating

Sunshine Short Term Offer

Sunshine Short Term Offer

  • Bad credit applicants considered
  • Fast approval service
  • Borrow up to $2,000
Security Logo

100% confidential application

Sunshine Short Term Offer

A short term loan with a fast and easy application available to those with good or bad credit. You can apply today and get approved for up to $2,000.

  • Loan amount: $2,000
  • Loan term: 9-15 weeks
  • Turnaround time: 30 minutes (conditions apply)
  • Fees: 20% of borrowed amount + 4% of borrowed amount each month
  • Income requirement: 50%+ of income cannot be from Centrelink
  • Bad credit borrowers OK
  • Quick and easy approval
  • No credit checks
Go to site
Promoted

Short term loan comparisons

Rates last updated September 20th, 2018
Name Product Max. Loan Amount Term of Loan Turnaround Time Costs Fortnightly Repayment $1,500 Product Description
Sunshine Short Term Loans
$2,000
9-15 weeks
30 minutes - conditions apply
20% of loan amount + 4% of loan amount each month
$396
A small loan up to $2,000 that you repay over 9-15 weeks. Loans approved and funded in as little as 30 minutes. Centrelink must not be your primary income
Wallet Wizard Smart Loan (Up to 2K)
$2,000
Up to 2 years
3 hours - conditions apply
47.8%
$316.70
Apply for up to $2,000 and be able to access your approved loan as a convenient line of credit.
Nimble Short Term Loan
$2,000
62 days to 1 year
1 hour - conditions apply
20% of loan amount + 4% of loan amount each month
$396
A loan up to $2,000 with terms up to 62 days to 1 year. Centrelink cannot be your primary source of income.
Credit24 Short Term Loan
$2,000
6-12 months
Same day - conditions apply
20% of loan amount establishment fee + 4% of loan amount monthly.
$396
Credit24 offers this loan up to $2,000 and gives you 12 months to repay.
Fair Go Finance Small Loan
$2,000
3-12 months
1 business day
Establishment fee from 10% of loan amount + monthly fee from 2%
$354
A small loan between $500 and $2,000 that can be funded in 24 hours.
Capfin Short Term Loan
$2,000
6 to 12 months
Overnight
20% of loan amount + 4% of loan amount each month
$396
A short-term loan from $500 that you can have up to 12 months to repay. All credit histories considered.

Compare up to 4 providers

Ultimately, a bad credit rating can have a big impact on your financial options, making it difficult to get a credit card, car loan, home loan or other forms of credit. But instead of looking for bad credit credit cards or no credit check options, you can improve your chances of approval by rebuilding your credit rating and managing money responsibly.

Start by requesting a free copy of your credit report and identifying the negative listings on your file. You can also check out our DIY credit repair guide for more help.

Back to top

Sally McMullen

Sally McMullen is an editor at finder.com.au who is a credit cards, frequent flyer and travel money expert by day and music maven by night.

Was this content helpful to you? No  Yes

Related Posts

Credit Card Offers

Important Information*
Citi Clear Platinum Credit Card

Interest rate

12.99

Annual fee

0*

*$99 p.a. after first year

Westpac Altitude Platinum Card - Qantas

Interest rate

20.24

Annual fee

50*

*$200 p.a. after first year

ANZ Low Rate

Interest rate

12.49

Annual fee

58
Ask a question
Go to site