It can create unforgettable memories, ease stress, and make you feel more confident and independent. And experiencing different cultures expands your horizons.

But what if you’ve had financial problems in the past that have resulted in bad credit? You may assume this rules out enjoying the benefits of seeing something of the world. But that’s not necessarily the case. 

On our comprehensive guide, you’ll discover everything you need to know about navigating the globe with bad credit.


What is Bad Credit?

In the UK, credit reference agencies (CRAs) gather and update credit history information every four to six weeks. Your credit score is based on this data. Bad credit reflects a poor credit score.

Lenders consider credit ratings when deciding whether to approve a loan. If you have a good credit rating, there should be no problem because you’re seen as a minimal risk. 

If on the other hand you have bad credit, it can be difficult to borrow money – you’re seen as too much of a risk. If you do manage to borrow money, you may have to pay high interest rates.


What Causes Bad Credit?

Various factors can contribute to bad credit, including:

  • Owing a lot of money on utility bills or late or missed payments on credit agreements.
  • Overspending on your credit card.
  • County court judgements (CCJs).
  • Declaring bankruptcy or entering into an Individual Voluntary Arrangement (IVA).
  • You’ve moved home but not updated your address on the electoral register.
  • Identity theft.


How to Repair Bad Credit

Rebuilding bad credit can be a lengthy process, taking several months or several years.

Steps to improve your credit score include:

  • Minimising use of credit.
  • Paying future bills on time.
  • Making sure you’re on the electoral register, which helps verify your identity.
  • Checking your credit report for errors and ensuring they’re rectified.


Seeing the World when You Have Bad Credit

Even if you’ve started to get back on your feet financially after seeing your credit score plummet, you may still face problems if you plan to go travelling.

Details of previous missed or late payments stay on your credit file for at least six years. This can make financing your travels difficult. Mainstream lenders are likely to be reluctant to offer you a travel loan, and you may struggle to get a credit card.

However, it’s still possible to see the world with bad credit and take a conventional holiday or gap year or study, volunteer, or work abroad. Ways to do this include using a debit card and getting a bad-credit travel loan.


How to Use a Debit Card for Travelling

A credit card is often needed for various aspects of travelling, but it’s not essential.

You can, for example, get airline tickets and book a room in a hotel or other accommodation online with a debit card. As long as the money clears your bank, you’ll have no problem checking in. Once you’ve arrived, it should be easy to local currency from ATMs with your bank card.

You may not even need a debit card if you choose to stay in a guest house or other private accommodation instead of a hotel. These places often accept cash payments, and they’re usually cheaper than hotels.


A Word of Caution

If your bank sees multiple charges from different areas of the globe, they may block your debit card as a security measure. You can avoid this by telling your bank in advance when and where you’re travelling. 

You also need to keep in mind that to use a debit card you need sufficient funds in the bank to cover payments. This can present problems when you have bad credit, and the solution lies in bad-credit travel loans.


How to Get a Credit Travel Loan

Financing world travel may be more difficult if you bad credit, but it’s far from impossible, even if you’ve already been rejected by some lenders. It will help if you can demonstrate that while you may have had financial difficulties in the past, you’re now managing your money better.

Many lenders offer travel loans for individuals with a low credit score. But trawling through them all can be confusing and time consuming. Alternatively, you can find a loan broker with a bad-credit loan comparison platform. This makes it far easier to get bad-credit travel financing from the most affordable lender.


Effects of a Bad-Credit Loan on Your Credit Score

Your credit score can drop temporarily when you get any type of loan. This is because you’ve taken on additional debt. But repaying the loan on time will bring your credit score back up and can help improve it over time.

If your lender uses a soft search of your credit history, it won’t damage your credit rating because it leaves no trace on your credit report.


How to Find Affordable Destinations

Once you have your bad-credit travel loan in place, you’re all set to begin planning how you’re going to see the world over time.

To avoid the risk of overspending on your travels – which could put a dent in future credit ratings – you may want to consider starting with the more affordable international destinations.

Here are a few ideas on cheap countries to go backpacking where you can stay for longer and enjoy a quality travel experience on a budget.


Nepal – the Federal Democratic Republic of Nepal – in South Asia, between India and China. A cheap country to explore, with reasonably priced accommodation, transport, and food. And you won’t want to miss the UNESCO World Heritage site of Kathmandu Durbar Square, one of Buddhism's holiest sites.   


Laos, in Southeast Asia, on the Indo-Chinese peninsula between Vietnam and Thailand. Ideal for a budget backpacking adventure, the “Land of a Million Elephants” is also renowned for its stunning scenery, including spectacular waterfalls.


Romania, in southeastern Central Europe. Romania offers travellers an affordable destination a little off the beaten tourist track, where you can find plenty of charming towns and free activities.


Hungary is another country in Central Europe that offers affordability for travellers. In fact, it’s one of the cheapest countries to visit in Europe, and ideal for short breaks on a budget.


Benefits of Travelling Despite Bad Credit

Bad credit may make it harder to borrow money but financing your travels is by no means out of the question.

Whatever your starting point for navigating the world with bad credit, it can be the beginning of an amazing life experience.

You’ll have opportunities to broaden your perspective through experiencing different cultures that can help you view the world in a new light. And you’ll be creating memories to cherish for a lifetime.