Bagshawe was born in London in 1971; her family moved to the country when she was seven. After being educated at Woldingham School, a Catholic girls' boarding school in Surrey, she was named 'Young Poet of the Year' in 1989 at the age of 18. She studied English literature at Christ Church, Oxford. She worked as a press officer with EMI Records, and then a marketing official with Sony, after which she became an author specialising in the "chick lit" genre aimed at young women. Her first novel, Career Girls, was published in 1995 and has been followed by 13 subsequent works.

At the age of fourteen she joined the Conservative Party, after being inspired by then-Prime Minister Margaret Thatcher. In 1996, however, she briefly switched to Tony Blair's Labour Party saying she believed him to be "socially liberal but an economic Tory". By 1997 she had returned to the Conservatives and helped her mother, Daphne, win a seat in East Sussex County Council from the Liberal Democrats. In 2001, Bagshawe co-founded the Oxonian Society with Joseph Pascal and HRH Princess Badiya bint El Hassan of Jordan.

Bagshawe was placed on the A-List of Conservative candidates in 2007. This move was criticised by David Burrowes, from the right-wing Cornerstone Group of Conservative MPs as favouring minor celebrities, such as Bagshawe, over local candidates when selecting who to nominate in elections. In October 2006 she was selected to stand in Corby. As part of her campaigning for the 2010 election, she appeared on Question Time and BBC One's The Big Questions.

An article in The Sunday Telegraph in 2009 reported "Some high-profile women are already installed in winnable seats: Louise Bagshawe, Annunziata Rees-Mogg, Priti Patel, Laura Sandys and Joanne Cash will all make colourful additions to the Tory benches."

She was elected in the 2010 general election with a majority of 1,951, defeating Labour incumbent Phil Hope. Although Bagshawe refused to confirm details, as a marginal constituency, her campaign benefited by "lavish donations from Tory peer Lord Ashcroft" estimated at £30,000/year since 2005, leading to criticisms of an un-level playing field.

In June, 2010, she was elected by other Conservative MPs to serve on the Select Committee for the Department of Culture, Media and Sport.

Bagshawe is divorced and the mother of three children. She is the sister of Tilly Bagshawe, a freelance journalist who published Adored in July 2005, and has a younger sister Alice and a brother, James.