What is a bad or poor credit rating?

A bad credit rating is a negative assessment of your finances by a credit reference agency based on your history of borrowing (or lack of it). If your credit score drops too low, your financial options will shrink. The good news is that a credit rating isn’t fixed – it changes in response to how you manage your finances. That means by showing you can be relied on to pay back what you’ve borrowed, credit reference agencies will turn your bad credit rating into a good one.

Man reading through some papers to review his credit rating

A bad credit rating can result in lenders offering you cards with higher interest rates, giving tighter credit limits or even turning your credit applications down. Don't be surprised if lenders don't offer you the interest rates that they advertise. Many will base the decision of what rate to give you on the likelihood that you won't pay back the credit on time.  

Where can you find your credit rating?

It can be frustrating when a mysterious number prevents you from investing in the important things in life, whether it’s an ideal home, a new car, or just a better credit card. If you’ve recently struggled to get credit, it might mean your credit rating has room for improvement. The first step to boosting your score is knowing how to do a credit rating check.

Your credit rating is totted up by credit reference agencies. The three biggest in the UK are Experian, Equifax, and Callcredit. Whenever you require credit, companies will look to one of these agencies to assess the financial risk of lending to you.

You can access your credit history for a small one-off fee.

Your credit rating is based on your credit score, which takes into account your credit history. You can access your credit history on the credit reference agencies’ websites, fees may apply. But to see your credit score, you may need to pay a monthly fee (30-day free trials are often available). For more information, read our guide on how to check your credit score

How to improve a poor credit rating

If you’d like to give your credit rating a lift, you can begin by using the below steps. The more you can tick off the list, the better chance you have of moving those all-important numbers in the right direction.

You could also try our Credit Builder tool to get simple and personalised hints and tips just for you.

1. Get a credit card

If you have no history of borrowing money, you’ll need to get started by establishing a credit record. Just as you’d only lend your car to someone you’re sure can drive, lenders feel more comfortable when they know a borrower has repaid money in the past. One proven way to show you’re reliable is by finding a credit card that suits your needs. Don’t worry, comparing cards won’t affect your credit rating unless you proceed through to an application.

2. Make your payments on time

It’s crucial to pay your debts on time every month. One missed payment could affect your credit rating into the future. If you’re struggling to keep up with your repayments, check out our article How can I manage my credit repayments?

3. Register to vote

Registering to vote usually only takes a few minutes. Credit reference agencies will look at the electoral register to check that you live at the address you’ve provided. If the addresses don’t tally, this will affect your credit rating.

4. Ensure your credit history is accurate

It’s a good idea to check your credit history on one of the credit reference agency websites at least once a year. That way you can be sure that any mistakes are quickly corrected and are not affecting your credit score. If you do notice a mistake, don’t hesitate to flag it with the credit reference agency and ask for confirmation that it’s been fixed.

If you find out your credit score could do with a boost, check out our tips on how to improve it.

5. Sign up for the Rental Exchange

If you're a private tenant the good news is that you can now build up your credit score by paying your rent on time through a scheme called the Rental Exchange. Each prompt payment will be added to your credit history.

6. Tread carefully after being refused credit

If you’ve recently been refused credit, it’s generally unwise to make a separate application without devoting some time to improving your credit rating. This is because lenders may see multiple applications as a sign you’re in financial trouble. Something you can do without affecting your score is use an online eligibility checker to see if you’re likely to be accepted for a new card. There are several to choose from, including Barclaycard eligibility checker.

7. Stay well within your credit limits

If you’re close to your credit limits across multiple balances, your credit score will be affected. This acts as a red flag to credit reference agencies that your finances are in danger of spinning out of control. To reassure the agencies you have everything in hand, try to keep your balances as low as possible.

8. Apply for a credit card designed for a limited credit history

Having a bad credit rating due to unpaid bills is one thing, but you might lack a good credit rating simply because you’ve never borrowed before. One way to build a credit rating from the ground up is to apply for a credit card specifically designed for that purpose. The Barclaycard Forward card gives to the chance to write the first page of your credit history by paying off as much of your balance as you can afford on time each month. Over time, your rating will get better and better.

Applications for this card are subject to status and terms and conditions apply.

Representative example

Representative APR
34.9% APR (variable)
Purchase rate
34.9% p.a. (variable)
Based on a
credit limit
Annual Fee
No annual fee

The approval of your application depends on financial circumstances and borrowing history.


What's next?

The tips in this article should put you on the path towards a healthy credit rating. But for more inspiration, check out more of our tips on improving your credit score.

How to improve your credit score