An easy guide to getting your first credit card with no credit history
The credit score is highly influential in our financial lives! In this sense, you might have asked: How to get a credit card with no credit?
But don’t worry – it’s not as hard as you think! Building a credit score is important for accessing long-term benefits, which can lead to higher scores and lower interest rates. Check out!
What does it mean to have no credit history?
Having no credit history differs from having bad credit or no credit score. A lack of credit history occurs when no credit movements are shown on your credit report. Moreover, this action makes it difficult for lenders to judge your trustworthiness. Without information to go on, lenders don’t know enough about you to predict how likely you are to pay them back.
There is no way that someone could actually have a zero score since there is no such thing in the most popular scoring systems. Instead, no credit history means you do not have the necessary information to calculate a score.
FICO Score Classification
The FICO score is a credit score used to determine the risk involved in lending to a borrower. FICO, or Fair Isaac Corporation, is the most widely used type of credit score.
In this sense, this score can range from 300-850, with higher scores indicating superiority with influential categories such as:
- Exceptional (800 and higher);
- Very Good (740-799);
- Good (670-739);
- Fair (580-669);
- Poor (579 and lower).
However, the FICO score has become an important aspect of how someone’s financial history is judged based on creditworthiness. Increasing one’s FICO score is essential for financial success.
How to get a credit card without having a credit history?
Getting a credit card with no credit might seem daunting, but it doesn’t have to be. Research shows how to get a credit card with no credit can easily be answered. Most traditional banks typically don’t lend to individuals without verified credit, but there are several ways to work around that. Student credit cards, secured credit cards, and more.
Additionally, becoming an authorized user on a parent or friend’s existing account may help. With one or more of these approaches and careful budgeting, having access to a credit card will be simple.
Different types of cards have different criteria for approval, and it’s important to make sure you choose one that suits your particular needs.
Credit card options if you have no credit history
Not having a good credit score does not prevent you from having a good credit card. So, if you have a low FICO score, Secured credit cards, Student credit cards, and Retail credit cards are a few options.
Fortunately, there are credit card options that don’t require an established financial track record.
Taking the time to research your different card choices and choose one that would work best for your situation is key.
Secured credit cards
Secured credit cards are a great option for building or rebuilding credit history. This option requires an initial deposit, often of the same amount as the credit line, as collateral in case of cardholder default.
As long as you pay off your secured card on time, you’ll reap the rewards of improved credit scores while avoiding extra fees. However, secured credit cards also offer great benefits to people with no prior credit history, allowing them to establish credit. This action standing can be beneficial for other financial transactions in the future.
Student credit cards
Student credit cards can be a great first step for college students starting to build or establish their credit. However, student credit cards are specially designed with terms that benefit college students. Moreover, many student credit card providers give you access to your FICO credit score. So you can track your progress in building credit.
With the right financial insight and knowledge, student credit cards can help young people learn how to responsibly manage their finances.
Retail credit cards
Retail credit cards, also known as store credit cards, are becoming an increasingly popular way for retailers to encourage consumer loyalty. Moreover, retailers often have low barriers to approval for these cards, but that doesn’t mean you are guaranteed to qualify. Even if you do get approved, the cost could be high.
Retail credit cards tend to have much higher APR rates and lower credit limits than other cards. If you’re hoping to take advantage of a great offer on one of these retailers’ products, check out all your options first.
Alternative credit cards
Alternative credit cards are emerging as an exciting innovation in the financial technology field. Companies offer the chance to qualify for a card, even if you don’t have a traditional credit history. These cards might analyze your banking history instead of examining your regular income and expenses to determine your ability.
Furthermore, these cards could be especially beneficial for individuals with strong financial standing. Alternative credit cards are revolutionizing how consumers manage their finances.
How to use your credit card responsibly and improve your credit score over time?
Slow and steady wins the race regarding establishing your credit score. When trying to get a credit card with no credit, you must demonstrate that you are financially responsible. This means every monthly payment for bills, loans, and credit cards should be paid before the due date to help improve your credit score.
So ensure you check if your payments are received on time. Also, pay off the statement balance each month or the outstanding balance at least twice a year, whichever is lower.
Make sure you also keep your account balance low by only using your card for necessary items that you can afford. Adding to that, it’s important for effective credit scoring to use the card consistently. Now that you’ve learned our tips, you’re finally ready to get your credit card and improve your credit score!
It is up to you to get started! Thanks for reading, and good luck on your new financial journey!
Also read: How to Get Guaranteed Instant Approval for Payday Loans Online
