how to get a credit card with no credit history
How to Get a Credit Card with No Credit History
It was tough getting my first credit card. Not because I was a bad credit risk, but because I had no previous credit history. Freaky, isn't it? So how to get a credit card with no credit history? This article should definitely help you with the query.
- Get in debt: The one way to create favorable history is to create debt, and repay it immediately or well within the stipulated time. Credit bureaus like Equifax and Trans Union do not really monitor your rent or insurance payments until something goes wrong with them. So, even if you have been the good Samaritan for ages, there is a high probability that you have not been noticed. Get them to notice you (and your good creditworthiness) by generating a debt and repaying it properly. Make sure you repay it on time though, or the late payment will give you records that you do not need, one stating you as a bad credit risk.
- Credit Card Applications: Whenever you apply for a credit card, your report is pulled out for a review, and this is bad news for you no matter what the outcome (if you've got the card or have been denied). The more times your credit report is pulled out for review, the more marks you have on your credit report, as the bureaus assume the worst about you. Stop applying to every company to grant you a credit card, you'll start looking credit desperate. Apply for only one, and only after you're sure you've generated enough good history to get your application accepted in the first go itself. Kelly Snowden of the American Credit Consulting claims that each credit history inquiry deducts about 2 to 5 points from your credit score.
- Credit Report Glitches: There are many online websites that give out free credit reports. Go get yourself one, and check if it is clean. If there is an unfair claim made against you when you were a minor, or if the due was supposed to be settled by another party, get it corrected immediately. Your efforts will all go in vain if you retain the bad reputation on your credit report.
- One Bank, Your Bank: If you are working and have an operational savings account, apply for your credit card from your bank first. If you have worked for the same employer or have stayed at the same address for long, your bank will consider you safe enough to give you a try. Your limit may be as low as $200, but something's better than nothing. Pay off your dues on time, before any interest becomes due (then you don't have to bother about the high rates they will charge you with), and watch your good record build itself. The credit card settlement must be done on time, or your bad history will be far worse than having none at all.
- Store Cards or Gas Cards: If your bank is not interested in backing you, try your local departmental store or gas station. Departmental store cards and gasoline station cards are very easy to get, and if you keep up the good work of paying on time, you'd have built your own history in just a matter of months. Make sure your timely payments get reported to the credit bureau, that's the agenda after all.
- Bank Programs: Many banks have programs that help you in building a favorable credit, and you can use one of them for your own. The banks offer you loans that you must repay before the loan is actually made. This bogus loan ranks as a loan fully paid within the stipulated period, and so generates good credit history for the user. The bank will of course charge you a little something for their help, but it is money well spent, don't you think?
- Pounce On Your Offer: If someone offers you a credit card, take it up even if the interest rate is high. The interest rates won't matter if you make all your payments in time, and you will get the bonus of generating a good record as well. Don't forget to renegotiate your interest rates once you have proved over a period of months that you are actually responsible with your credit facilities.
- Secured Credit Cards: A secured credit card is not only the quickest way to get a credit card (with the least amount of hassles), but is also a good way of building a good credit history for the individual. The individual is asked to create a savings account with a predetermined deposit amount (or even a CD), and this is frozen in return for a credit card, till the user continues his credit card use. This frozen account takes the default risk out of the credit card payments, as any default is compensated with the amount in the account. Yet, if you wish to build a good record, and get the secured card converted to an unsecured one, I suggest you make all the payments in full, and on time. Bounced payment checks are the worst thing that can happen to your credit. Check out all the contract details for any other fees and penalties before you rush and agree to a secured credit card.