Having no credit history can make it difficult to obtain credit cards and loans. However, building a positive credit history is essential to achieving financial goals, such as buying a car or home.
So, what can you do if you don’t have a credit history but want to start building one? In this article, we’ll explore how to get a credit card with no credit history and some tips for using credit responsibly.
Consider a secured credit card One option for those with no credit history is a secured credit card. A secured credit card requires a cash deposit as collateral, which acts as the credit limit.
For example, if you put down a $500 deposit, your credit limit will also be $500. This helps the card issuer mitigate risk and makes it easier for those with no credit history to get approved.
As you use the secured credit card and make on-time payments, you’ll start to build a credit history. Some secured credit cards even offer rewards programs, just like traditional credit cards.
Become an authorized user Another way to get a credit card with no credit history is to become an authorized user on someone else’s credit card.
If a friend or family member trusts you to use their credit card responsibly, they can add you as an authorized user.
As an authorized user, you’ll receive a credit card with your name on it, but the primary account holder is responsible for the payments.
While being an authorized user won’t directly impact your credit score, it can help you build credit indirectly.
If the primary account holder makes on-time payments and maintains a low credit utilization rate, it can reflect positively on your credit report.
Apply for a student credit card If you’re a student, you may be eligible for a student credit card.
Student credit cards typically have lower credit limits and fewer fees than traditional credit cards, making them an excellent option for those with no credit history.
Additionally, some student credit cards offer rewards programs and other benefits like cashback on purchases or discounts on textbooks.
Look for credit cards for people with limited or no credit history There are credit cards specifically designed for people with limited or no credit history.
These credit cards typically have higher interest rates and fewer rewards or benefits than traditional credit cards. However, they can be a good option for building credit if used responsibly.
Some credit cards for people with limited or no credit history even offer credit monitoring services or tools to help you manage your credit responsibly.
Use credit responsibly Once you’ve obtained a credit card, it’s essential to use it responsibly. Make on-time payments, keep your credit utilization rate low, and avoid carrying a balance if possible.
Responsible credit use is the key to building a positive credit history and improving your credit score over time.
Getting a credit card with no credit history may seem challenging, but it’s not impossible.
Consider a secured credit card, becoming an authorized user, applying for a student credit card, looking for credit cards for people with limited or no credit history, and using credit responsibly.
With time and effort, you can start building a positive credit history and achieving your financial goals.