I’m on a low income

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Credit Cards When You Work Part Time or Have a Low Income

For many lenders, it’s your credit history rather than your earning power that’s important in deciding whether they’ll give you a credit card. Even if you have a low income or only work part-time that needn’t affect the possibility of getting a credit card, although it may well have an impact on the credit limit you’re offered depending on exactly what your wages are.

If you have a low income, make sure your credit file is as appealing as possible to lenders.

  • Ensure that your credit report is accurate.
  • Start managing your existing credit responsibly as some lenders are more concerned with your recent credit history rather than older adverse items on your record.
  • Make sure you pay bills regularly and on time as for some lenders, a year or two of positive detail on your Credit Report will help improve your score and your credit risk, irrespective of what your earnings may be.

The credit limit you may be offered is not based on a multiple of your wages although obviously your ability to afford the probable debt repayments is taken into account.

Even if your income is around £8,000 per annum from part time work, it is still worth examining your options for a credit card as each lender has different criteria.

When you apply for a credit card you are credit scored. This involves looking at your previous credit history including things like outstanding debts on other cards, loans, or bank overdrafts, available credit (the amount of debt that you could have if you used all the credit available to you) and whether you've ever missed or been late in making repayments.

You can check your own Credit Record; see ‘Checking Your Credit Record.’ for more information. If you don’t have email or access to a computer, you can write to the Credit Reference Agency which must reply to you within seven working days. Your Credit Record will show you the information about you that lenders also see and will also help you detect the early warning signs of identity fraud. If the information is wrong you can demand that it is changed or removed.

However, you could be turned down because you are unable to prove regular or high enough earnings that suggest to the lender that you’d have problems affording the credit. Some lenders only look at the income you earn from your job, some look at your income from all sources (e.g. rent that you receive from tenants), while others look at the total income of everyone in your household (i.e. you and your partner’s income). Lenders sometimes disclose on their websites the minimum income you need in order to consider you for credit and what types of income they take into consideration. So check the different lenders’ criteria before you start applying!

Next Steps

  1. Check your Credit Record
  2. Check lenders’ criteria for minimum income
  3. Continue paying down your existing credit and/or loans
  4. Don’t exceed any credit limits you have
  5. Never give false details on applications

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