How Do You Get A Credit Card With No Credit History In The US. Making your first credit card application can seem like a nightmare when you have no credit history.
Whether you just moved to the United States or just have not had the need to hold a single credit card, the thought of facing a rejection due to not having a credit history can be scary.
But trust me, I understand how you feel as I have been there too. However, let me clarify one thing it’s not as tough as you believe it to be. In fact, there are multiple ways you can apply for your first credit card today and make progress towards building your financial goals.
Using this guide you will learn how to apply for your first credit card without having a credit history.
From the best credit cards to choose to the right tips to help you build and improve your credit, I have got all you need. Because of my detailed explanation of the process and the requirements needed, this guide will offer nothing but help regardless if you are fresh or have applied multiple times and have been denied. So let us get started.
Key Takeaways
- No credit history? No problem a secured credit card can be used to start improving your credit.
- For those in school, student credit cards allow easy adaption which makes applying in limited credit better.
- Being an authorized user on someone else’s card allows building credit easily.
- Credit builder loans are an excellent method for developing credit with a decreased risk of default through low monthly payments.
- One could consider a no credit check card but a higher fee is applicable.
- Payment history, credit use, and credit monitoring are necessary to maintain.
Understanding Credit History and Its Importance
So, how can one get a credit card with no credit? Well, before I get to that I think we need to explain what credit history is and why it’s important.
What Is Credit History?
Essentially, your credit history is a summary of how you have handled borrowing and repaying money. It consists of your bill payments, loans, credit cards payments, etc. This information is acquired by the couriers, Equifax, Experian, and Transunion.
Whenever you apply for a credit card with a certain bank or a lender, they check your credit report to assess the possibility of risk associated with giving you a loan.
This is exactly the reason why it is hard to get a credit card approved in the first place as without any credit history, lenders have a difficult job determining the reliability of a person when it comes to spending on credit.
Why Is Having No Credit History a Problem?
Not having a credit history puts you at square one. If you were to apply for a loan, lenders would not be able to see your record and predict with certainty that you will be able to repay the borrowed amount hence making it difficult for them to approve your request.
However, there is no need to be tensed as the lenders can get around this weak situation which I am going to help you to understand easily.
How to Get a Credit Card With No Credit History: 5 Effective Ways
Now that we are aware of how difficult it can be to qualify for a credit card without a credit history, let’s discuss what you can do about it. Here are five tried and tested methods that you can utilize to grab your first card, building your credit history in the process:
1. Apply for a Secured Credit Card
If you’re just getting started with credit, then one of the best choices you can make is a secured credit card. Secured cards are a little different than standard credit cards in that you are required to make a cash deposit first. This deposit is then treated as your spending limit, and the risk to the lender is largely mitigated.
How it works:
On a secured card, if you deposit $200 , that’s your limit on that card – so when you charge your card, if you make the requisite payments on a timely basis, your credit score will slowly increase, and eventually, you may qualify for an unsecured card.
Some popular secured credit cards in the U. S. include:
- Discover it® Secured
- Capital One Secured Mastercard
- Citi® Secured Mastercard®.
After checking their eligibility requirements, my first recommendation would be to set up a secured card since that would be the best way to kick off your credit experience. In addition, many secured cards allow cashback and other features when you have made a number of transactions.
2. Consider a Student Credit Card
Especially if you are a student, you are likely to qualify for a credit card for students. This is the type of cards that are issued to persons that have not qualified to have credit history or have little to no credit history. Such cards however attract smaller credit limits and a reduced range of rewards, However, they are a good way to accumulate credit while still at school.
How to apply:
Student cards are issued by various banks as a regular card but the requirement is slightly different. To apply for a student card, you normally do not require any form of credit history or existing credit to qualify, while with the traditional credentials, it would be impossible. Preferences are given to funds availability or earning capacity based on the prospective students responsibility toward credit.
Some credit cards for students that you can also look into are listed below:
- Chase Freedom® Student Credit Card
- Discover it® Student Cash Back
Tips: Take care when using this type of credit card. For any payments you do not wish to pay, do not apply for student cards and do not apply for student platforms. If you need a bill paid, stay within the required limit and pay on time. By doing so, a positive credit history will be established in no time.
3. Become an Authorized User on Someone Else’s Credit Card
Try and find a family member or a close friend who has an acceptable credit and ask him to include you as a secondary user. While you will have access to their card and be able to use it on the other hand, bear in mind that you are not liable for the payments. So the preference is mainly on the positive credit information that is on their report, since it is beneficial for you to have a report under your own name but not apply for a card.
How it works:
When adding you as an authorized user, you would be almost sharing their credit. This is a fast way to establish credit, just ensure the credit card product issuer reports authorized users to the credit bureaus which a lot of them do.
4. Look Into a Credit-Builder Loan
Other alternative could be the credit-builder loan. The loans are targeted to people with the aim to build or enhance their credit ratings. With a credit-builder loan, instead of giving you the funds straight away, a small amount of money is borrowed from you and it is kept in a savings account while you make monthly installments for a set period of time. After finishing paying for the loan you are able to access the funds and the good payment history goes to the credit bureaus.
Many credit unions and community banks provide these loans and they are among the best ways to build credit.
5. Explore Cards for Those with No or Bad Credit
No credit? no job? bad credit? no problem! These problems have a solution—the right credit card. It goes without saying that fees and interest rates might be exorbitant, however, if all other avenues have led to a dead end, it is worth pursuing. But remember, use caution with these cards; steer clear of the cards with the highest fees as well as the cards that are shrouded with murky terms.
Consider the following examples:
- Milestone® Gold Mastercard®
- Credit One Bank® Unsecured Platinum Visa®
Important Tips for Building Credit Once You Get Your Card
Once you are done choosing which card to use, the next step is rational usage of the card. Here are a few worthwhile tips that will guarantee a well-deserved interstate highway of your path in amassing a dazzling credit score:
1. Pay Your Bills On Time
This is by far the most vital thing to bear in mind when building your credit profile. Fix yourself the mentality of automatically paying or remind yourself to pay, triply so, if it’s a due date.
2. Keep Your Credit Utilization Low
In a perfect world, aim at utilizing as little as 30% of your credit limit. If say your credit limit is $5oo, then do everything within your capability to ensure that your balance is never in excess of $150.
3. Monitor Your Credit
Your credit score is a big factor determining your ability to secure loans, it’s used frequently by your credit card issuer , and there’s plenty of free software out there that’s automated for the job, simply search for Credit Karma to begin tracking your score today. Getting the full story and score will help you keep everything in place and help you catch mistakes.
4. Don’t Apply for Too Many Cards
Applying for a credit card might result in a slight decrease in your credit points. Refrain from applying for too many cards since you won’t require them all.
My Opinion
I find it very easy to obtain my first credit card even when I have no credit history in the US. The ultimate goal here is to build a good credit. Starting with a secured credit card, becoming an authorized user or attempting to get a student card are great approaches.
Nevertheless, one must exercise discipline and self-control especially at the beginning. With patience, more options and lower fees will be readily available.
Bear in mind that credit building does take some time, it doesn’t happen overnight. All it requires is a consistent step by step daily approach and the next thing you know is good credit score with fantastic opportunities. Good Luck, and get started on it now!
