Want to apply for a credit card when you have a poor credit score? Here's what you need to know.
It's difficult to get approved for a credit card in Australia when you have bad credit history. This is because your credit file is checked every time you apply for a credit card – and most issuers require you to have a good credit history to get 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, it's possible to improve your credit rating over time and increase your chances of credit card approval in the process. Use this guide to learn more about your credit score and how it affects credit card applications. We also compare credit options when you have bad credit and offer tips for getting your credit history back into shape.
What is my credit score?
Your credit score is derived based on factors in your credit history, and will determine your success when it comes to applying for credit. Currently, there is no one standardised way of calculating credit scores, so the credit rating bodies, banks and credit card companies use their own rating systems in assessing client credit scores.
Get Your Free Credit ScoreTo give you an idea of how credit rating works, here are details of how one of the major credit reporting bodies in Australia, Equifax, scores and rates their clients.
| 833-1200: Excellent |
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| 726-832: Very Good |
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| 622-725: Good |
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| 510-624: Average |
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| 0-509: Below Average |
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Read more about your Equifax Score
What financial 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 option:
- 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.
- Bad credit payday loans. A cash or payday loan is a loan of up to $2,000 that has to be repaid between 16 and 365 days after it’s issued. Bad credit payday loans can be a quick answer to your short-term money woes and some lenders even skip the credit check as long as you’re employed. Repaying this loan on time can help with rebuilding your creditworthiness but there may be high interest rates and fees for choosing this option.
- Bad credit personal loans. Personal loans are traditionally used when borrowing larger amounts of money and typically have a stricter approval process than payday loans. But there are some bad credit personal loans on the market that cater especially for people with poor credit ratings. 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
Borrow up to $1,800 with no credit check
Sunshine Short Term Offer
- Centrelink borrowers considered
- Fast approval service
- Borrow up to $2,000
100% confidential application
Borrow up to $1,800 with no credit check
Sunshine Loans offer a no credit check loan with a fast and easy online application to employed borrowers. Apply today to be considered.
- Loan amount: $2,000
- Loan term: 9 weeks
- Turnaround time: 30 Minutes - conditions apply
- Fees: 20% of borrowed amount + 4% of borrowed amount each month
- Must be 18+
- Confidential and secure!
- No Credit Checks - Must be employed
Short term loan comparisons
Ultimately, a bad credit rating can significantly impact your lifestyle, making it difficult to getting a car, a home loan or other forms of credit. If you find yourself in such a position, don’t despair. Making the right choices from now on can lead to financial freedom down the road.
Work on improving your credit rating and managing your finances so that you can live free of debt. You may begin by requesting a free copy of your credit report and identifying the negative listings on your file. See our DIY credit repair guide for more help.
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