Want to get a credit card when you have no credit history? If yes, this article contains everything you need to know in order to get a credit card without credit history. Credit history shows your creditworthiness—a valuable factor lenders consider to approve your loan application.
Don’t think for a second that you’re left out if you have no credit history. You can get still get a few types of credit cards—a student, secured, or retain card—and start building your credit history.
Read this article till the end to learn how it works.
To Get a Credit Card with No Credit:
- Understand What “No Credit History” Means
- Know Why Credit History Matters
- Learn How Credit Scoring Models Calculate Your Credit Score
- Understand What to Consider Before Applying for Your First Credit Card
- Know What to Avoid When Applying for a Credit Card With No Credit History
- Understand the Credit Cards You Can Get With No Credit History
- Learn How to Build Credit History With a New Credit Card
- Know How to Apply for a Credit Card
- Understand Other Alternatives to Getting Credit
Happy? Let’s get into it.
1. Understand What "No Credit History" Means
To get a credit card with no credit history, understand what “no credit history” means. You’re credit invisible with no credit history, which means no lender has informed Experian, Equifax or TransUnion—the three major credit bureaus—about the ways you’ve used credit in the past. Also, no credit history means you haven’t had any credit product so far.
>>>MORE: How to Properly Use Credit Cards
2. Know Why Credit History Matters
To apply for a credit card with no credit history, know why credit history matters. Lenders use your credit history to judge if you’re financially responsible and also to determine your credit risk before approving your loan application.
You enjoy many benefits with a plausible credit history, including:
- Loan and credit approval. Your credit report and credit score inform a lender about your debt, payment history, and so on. Such information tells your lender whether you are creditworthy or not. If you have no credit history, however, a lender can also check your history of rent and utility payments to approve your loan application.
- Loan terms. Access low interest and favorable repayment terms loan with a credible credit history. If you have no credit, expect a lower credit limit, higher interest rates and unfavorable repayment terms.
3. Learn How Credit Scoring Models Calculate Your Credit Score
To obtain a credit card without credit history, learn how credit scoring models calculate your credit score. Your credit report contains your credit history summary. Based on your credit history, a credit score is three-digit number that reveals your credit risk at a glimpse. Credit scores fall between 300 and 850 using FICO or VantageScore models.
A credit score is a numerical representation of your
- payment history (35%),
- credit utilization ratio (30%),
- credit history length (15%)
- recent credit activities (10%), and
- account types (10%).
Your credit score can be
- excellent (720+),
- good (between 670 and 719),
- fair (between 630 and 689), or
- poor (below 620).
Understand that the higher your credit score, the better it is when it comes to getting approved for higher credit limits and lower interest rates.
4. Understand What to Consider Before Applying for Your First Credit Card
To get a credit card without a credit history, understand what to consider before applying for your first credit card. Know the eligibility requirements before you submit your application—ensure you’re 18+ years to get started.
Identify which credit card works best for you and check the credit card’s interest rates—payable monthly or per annum. Also, confirm if you pre-qualify before submitting your application.
5. Know What to Avoid When Applying for a Credit Card With No Credit History
To apply for a credit card with no credit history, know what to avoid when applying for a credit card with no credit history. You have limited options when it comes to applying for a credit card with no credit history.
Also, understand that different credit card issuers consider different factors before approving your credit card application. Remember to avoid getting a credit card with higher fees. Check if you are eligible for a credit card with no annual or higher maintenance fees.
Another factor to avoid is high APRs. Research for credit cards with lower interest rates and choose the one with the most favorable offer. Be ready to pay your bills in full every month. This will help you to build your credit limit and boost your creditworthiness.
6. Understand the Credit Cards You Can Get With No Credit History
To get a credit card without a credit history, understand the cards you can consider with no credit history. If you’re credit invisible, consider any of the following options to get a credit card with no credit history:
- Secured credit cards. Check if your bank offers a secured credit card. Secured credit cards require collateral (money). Banks, credit unions and other card issuers require different minimum deposits before creating your credit card accounts. The card issuer places a limit on the credit card, which you can increase as you make consistent payments on your credit card every month.
- Student credit cards. Use a student credit card responsibly to build a plausible credit history—and you don’t need a trackable credit history or be a student to qualify for a student credit card. Avoid carrying your balance over to avoid paying extra fees.
- Retail store credit card. In case you do not qualify for a student credit card or a secured credit card, consider a retail store credit card. Don’t forget that the card issuer can report how you use the credit card to credit bureaus. So use the card responsibly to build your credit history. Remember, the use of a retail store credit card may restrict you to selected stores it is compatible with.
7. Learn How to Build a Credit History With a New Credit Card
To receive a credit card with no credit history, learn how to build a credit history with a new credit card. Understand that the reports your card issuer sends to the credit bureaus can either build or hurt your credit history. To build credit with a new credit card, pay your bills on time and pay in full if you can. Also, limit how often you apply for new credit cards.
8. Know How to Apply for a Credit Card
To obtain a credit card without credit history, know how to apply for it. You’re ready to get your first-timer credit card!
- Determine where to apply. Online application is fast and quick, depending on your lender. Some lenders require you to apply in person.
- Prepare necessary information. Present information, including your full name, date of birth, income, address, and social security number as you apply. Gather any other information your card issuer requires.
- Wait for an approval. Submit your application and wait for an approval email. Don’t forget to use your card responsibly and monitor your credit card by checking your credit reports. Get a copy of your credit reports from Experian, Equifax or TransUnion.
>>>GET SMARTER: How Do Credit Cards Work?
9. Understand Other Alternatives to Get Credit
To get a credit card when you have no credit history, understand other alternatives to build credit.
If you can’t get a credit card on your own:
- Become an authorized user. A person—your friend or family member—who uses credit responsibly can add you as an authorized user on his or her credit account. You get your own card but make payment on the person’s account line of credit.
- Get a co-signer. Ask someone to apply for a credit card with you. Using a co-signer has its negative sides. If you default on your payments, the co-signer will be responsible.
- Consider getting a loan. Build credit with a payday loan. Usually, payday loans are short-term loans with high interest rates personal loan you must pay on your next payday. Remember, payday loans are exclusively expensive and should be the last option to consider.
Recap
It is not enough to get a credit card without a credit history. You must ensure you make on time payment and don’t carry your balance over. If you need a kind of first time credit card with no credit history, understand what “no credit history” means, know why credit history matters and learn how credit scoring models calculate your credit score.
Understand what to consider before applying for your first credit card, know what to avoid when applying for a credit card with no credit history, and understand the credit cards you can get with no credit history.
Learn how to build a credit history with a new credit card, know how to apply for a credit card, and understand other alternatives to get credit.
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