Building credit with a credit card can seem like an uphill battle when you don’t know where to start. After all, you need to show lenders that you are responsible for the money you borrow in order to gain access to credit, but few lenders will take your chances without a credit score and a history of on-time payments and responsible use. Talk about a frustrating problem to deal with.
While most credit card issuers refuse borrowers who don’t have a credit history, the good news is that just because you don’t have a credit score doesn’t automatically mean you can’t get credit. credit card. Certain types of credit card products are intended for borrowers who have a limited credit history or no credit history. These credit card products work the same as normal credit cards and are usually the first step in building a strong credit history that lenders can trust. Here is how to get a credit card without credit.
Get a credit card with no credit history
When you don’t have a credit history, you don’t have anything on your credit report to show that you’ve had access to credit – meaning lenders can’t tell if you’re creditworthy or not because they have no information to trust. on for that decision. You don’t have a low score – you don’t have any score at all. So you are basically starting from scratch to create credit from scratch.
Having no credit rating is a lot different from having a bad credit when it comes to borrowing money. A bad or low credit rating is a signal to lenders that you have misused credit products in the past, and therefore, you may not be responsible for the money they lend you. This can make it harder to open credit card accounts, as lenders will have to worry about you defaulting on your account or making late payments – or displaying other less than ideal credit behavior.
While not having a credit history can make it harder to get a credit card, it’s a little more ideal than getting over a bad credit history. The main goal when starting from scratch on your credit is to get a credit card and prove to lenders that you can use the money you borrow responsibly. If you shop, pay your bill on time, and avoid maxing out the card limit, you’ll be on your way to building a strong, default-free credit history.
That said, sometimes getting a credit card that creates credit can be easier said than done. If you don’t have a credit score, the major lenders won’t approve you for the best credit cards on the market. You will need to start with credit products that are unique to your situation – and they may not offer the same types of benefits that you would get with a leading credit card.
However, these credit cards will help you build credit, so it’s definitely worth the time and energy spent getting one. Here are some of the card options that you can have.
No credit credit card options
If you don’t have a credit score, you need to target the right types of credit cards. Otherwise, you will likely be faced with a denial of your request. Your options for getting a credit card without credit include:
A starter card or a secured credit card
Secured credit cards are one of the best credit card options when trying to accumulate credit because they are for people who don’t have a credit score. These cards work like regular credit cards: you borrow money from a lender, swipe to make purchases, and then pay off the money in full or with interest over time.
The main difference is that you need to deposit a security deposit to get a secure credit card. The amount you pay for your security deposit is usually up to you and will almost always be the equivalent of your credit limit. For example, if you deposit $ 1,000 on a secured credit card, you will usually have a credit limit of $ 1,000.
And just like you would with a regular credit card, you’ll be billed each month for what you spent the previous billing cycle on your secured credit card. However, you are not using your security deposit to pay the bill. You pay this money back to the lender each month by one of the methods offered by the lender. With a secured card, your security deposit is held by the lender in the event of default. It is not a replacement for your monthly payments.
However, the lender does not keep your security deposit forever. In almost all cases, the secure credit card deposit you make is refundable after a certain period of time – or when you close your card – as long as your account is in good standing. In the event of default, the credit card issuer keeps your deposit.
Many of the major card issuers will offer these types of secure cards to customers who do not qualify for a typical credit card. Some will require credit checks and some will not, but the application process is the same as it would be otherwise. You apply, get approved, and your card is opened after you make your security deposit to the lender. These cards also report to the credit bureaus every month just like a regular credit card.
Some lenders will also offer starter cards, or unsecured cards with lower limits and higher interest rates, to borrowers without a credit score. The options for starter cards are usually limited to certain types of student credit cards or other similar card options, but if you do your research you may be able to find a lender that offers this type of card. without security deposit.
Be added as an authorized user
Another option for getting a credit card without credit is to become an authorized user on someone else’s credit card account. You don’t need any credit to become an authorized user, but you will need to ask a friend or family member who has good credit and has access to credit products to add you to their account. If they agree to do so, you will get a credit card linked to their account, and it can be used like any other credit card.
The big difference between an authorized user account and your own credit card account is that you don’t rely on your own credit image to get a credit card. You use the other person’s on-time payments and responsible credit card history to get added to a credit card account instead.
This will help you build your credit score and will also generally give you access to better credit products than you would otherwise have without a credit score. The main downside to this option is that it can be difficult to get someone else to agree to add you to their credit card account, as they, and not you, will be legally responsible for the charges. fees that you will incur.
That said, it is important to understand the agreement between you and the primary account holder if you are going this route. Authorized user accounts can become persistent very quickly if there is no repayment plan in place with the other party, so make sure the details are sorted out before being added to the account or use the map.
A store credit card
Store credit cards, or cards with limited use in a particular retail store, may also be available without a credit score. Many people use these cards to build credit and access other types of credit cards.
Unlike secured cards, however, you won’t need to make a security deposit on a store card in most cases. These cards are almost always unsecured, which means the lender gives you a credit card limit based on your credit score and financial situation, not your security deposit.
That said, the limits on these cards are usually much lower than what you would get with a regular credit card – and their scope is limited as well. You can only use them in stores the cards are associated with, and the interest rates tend to be a bit higher than they would otherwise be.
You usually apply for these cards the same way you would apply for any other credit card. You will need to provide your information to the lender, in store or online, and the issuer will make a decision based on the information you provide.
Final thoughts
Getting a credit card without credit doesn’t have to seem impossible. There are ways to get credit cards without a credit score, but you will need to do some research to decide which route is best for you. And with responsible use, your new credit card will help you build a strong credit base that will give you access to the types of credit products you want or need in the future – which is worth your time. fuss when applying for a credit card with No Credit.
