How to apply to borrow money, like a credit card or loan

Using credit to buy something can be expensive. Waiting and saving up might be a cheaper option.  

See Making sure you can afford to borrow for more information.

If you're struggling, borrowing money might seem like your only option. But it can make things worse. You're not alone and help is available. 

Here's what to try first:

1. Use our Bill prioritiser to help you understand which debt to tackle first.
   
2. If you think you'll miss a payment, contact your creditor to let them know.
   
3. If you've already missed a payment, use our Debt advice locator tool.
   
4. Use a Benefits calculator to see if you qualify for any support.
   
5. Use our Budget planner to keep track of your money and bills.
   

Before borrowing money or applying for credit, follow these steps.

Always make sure you’re able to afford an extra repayment on top of your existing bills and commitments. 

To help work out how much spare cash you have each month, try our free and easy-to-use Budget planner. 

Lenders will also ask about your income and regular expenses to see how much you can afford to repay.

This information, along with other factors, typically helps them decide if they’ll accept you and how much they will lend you.

Your credit reports show: 

• if you’ve borrowed money before  
  
• how much you currently owe  
• if you’ve kept up with repayments. 

But you might find errors, like a typo in your address or an account you thought was closed. This is important as lenders usually check this information when deciding whether to accept you.  

There are three credit reference agencies, so you have three credit reports to check. Report any mistakes to the credit reference agency straight away.

If you spot products in your name that you didn't apply for, you might be a victim of  identity theft. It's important to:

• speak to the provider of any fraudulent account listed on your file
• report it to Action FraudOpens in a new window or by calling 101 in Scotland.

You could also consider paying for Cifas Protective RegistrationOpens in a new window. This tells lenders you've been a victim of fraud, so they'll do extra checks to make sure any new credit application is genuine.

You usually need to pay interest when borrowing money, but some products are cheaper than others. Generally, the faster you can repay, the less it will cost you.

Once you’ve decided on the type of credit to apply for, the next step is to compare deals. 

An eligibility calculator is the best way to do this as it only shows products you qualify for and how likely you are to be accepted, without affecting your credit file. 

It might also show if you’re guaranteed to get the deal or interest rate.  

You can find eligibility calculators on many lenders’ websites and comparison sites, such as:   

• MoneySavingExpertOpens in a new window  
• Credit KarmaOpens in a new window  
• ClearScoreOpens in a new window    

Since no website scans all lenders, it’s best to use a combination to ensure you're seeing all available options, including exclusive deals. 

If you’re not seeing many results, consider looking at credit builder products, such as credit cards that help improve your credit history.   

If you can’t find an eligibility checker for the product you want, always double check that you meet the eligibility criteria (such as a minimum income amount).

Once you’ve chosen the best deal for you, check that you can afford the repayments.  

Also, be aware that you might not get the exact deal advertised. Look out for terms like: 

• ‘Up to’ – usually to describe a promotional interest rate. For example, up to 18 months at 0%. This means some people might get a shorter period, such as 10 months. 
  
• APR (Annual Percentage Rate) – for example, 5.9% APR. Only 51% of people approved for the product must get that interest rate or better, others can be charged much more, such as up to 30%. 
  

Before submitting your application, double check all details are accurate and matches the information held on your credit report.  

You should find out if you’ve been accepted immediately, though further checks might delay the process by a few days. 

Multiple applications in a short period can damage your credit score, making lenders less likely to lend to you.   

Instead, ask why you were declined. You might be able to fix the problem or appeal the decision.  

Our tool What to do when you’ve been refused credit gives you a plan to improve your chances next time.