Numerous credit card products are marketed as being designed for people with good credit, but the term itself is somewhat ambiguous. This is because different credit reference agencies score people slightly differently. However, in general people with good credit are unlikely to have received CCJs, frequently defaulted, or paid their minimum payment late. They are also likely to have a reasonable income and settled personal circumstances (often indicated by inclusion within the electoral role).
The credit cards available to people with good credit vary in terms of attributes and features. Some offer the traditionally popular 0% balance transfer, whilst others offer rewards and other benefits. It is therefore wise to research the products to find the best fit before making an application.
In the UK, credit cards are often marketed with eligibility guidance. This guidance benefits both the applicant, who knows not to apply for a product they are ineligible for, but also credit card issuers, who can reduce the number of failed applications they process.
Eligibility guidance typically includes minimum age, income, UK bank account, and UK residence requirements - all of which leave little scope for misinterpretation. However, many issuers also include guidance as to credit score eligibility requirements which, in the UK, can be far more subjective.
Unlike the United States, where FICO offers defined ranges between which different scores are categorised, the UK has no universal credit rating system. Three different credit rating systems exist; one for each of the main UK credit reference agencies (CRA) - Experian, Equifax and Callcredit.
Each CRA uses their own data (together with third party data) to derive an individual’s credit score. However, the exact data sources of each CRA vary slightly, as do the ‘weightings’ they give different data elements, as they seek to best reflect their understanding of what constitutes various credit types. This can make credit score guidance in the UK very obscure.
Of course, some people are fully aware of their credit rating, especially those at the extremes. Indeed, an entire category of credit cards, targeted towards people who know they have poor credit has evolved in the shape of Bad Credit credit cards. Nevertheless, for people who are not at the extremes of credit scoring, it can be difficult to understand which bracket they fall into. How good is good? How bad is bad? Unfortunately there is no failsafe way of knowing. However, credit card issuers also understand the issue, and many now offer ‘down-sell’ products for people who fail to meet the strict criteria require for the advertised product. Admittedly, these products can be a poor reflection of the product an individual applied for, but some are still competitive products in their own right.
Of course some people are happy to apply for products and accept rejection. Others are happy to take the down-sell products offered to them when they apply for other products, but perhaps the best way to ensure which product is obtainable is to use the online eligibility checkers now offered by a number of different issuers.
Traditionally thought of as tools for people with bad credit, to see if they might be accepted, eligibility checkers are now commonplace amongst even prime credit card issuers and are a useful way to understand whether an application is likely to be accepted, before a full application is made.