Applying For A Credit Card With No Credit
History
Oddly enough, not only will bad credit
work against you when applying for a loan or a credit card, but no credit
will too. Even though this doesn't seem fair, it is the way things work
in the complicated world of consumer credit. Lenders are leery about opening
accounts for people with no credit history because they simply have nothing
to base your reliability on.
So, if you can't build a credit history
without credit and you can't get credit without a credit history, just
what has a person to do? It's nearly impossible to rent a car, stay in
a hotel, or shop online without a credit card, so let's explore a few of
the options that can eliminate this Catch-22.
NOTE: You
should have a credit score of at least 580 to be considered for a loan.
If you don't KNOW your credit score, you can find out instantly here.
Available Credit Options
Although many of the major credit card
companies won't give you a card without a credit history, some smaller
ones, like department stores, will. Find a department store that will issue
you a card and apply for it. You can try getting a gas station card also.
Either way, use your card but be sure to make all payments on time. Your
goal is to build a good credit history, not just get a credit card.
Find a credit card company that will review
your overall financial situation and not just your credit history. Some
lenders will look at your employment history, your housing situation, and
how often you have moved. If this is all on the up and up, they may approve
your application. Again, use this card wisely.
Credit Unions
If you are a credit union member, or are
eligible for membership, see what their card issuing terms are. Although
they are no giving out cards with their eyes closed, they will often have
more relaxed conditions for members. You no longer have to work for a specific
company to be eligible to join a credit union. So it's well worth checking
if there's one in your area.
Secured
Credit Cards
Secured credit cards are offered by lenders
who will give you a line of credit that either matches, or is slightly
higher than, a cash deposit that you give them to hold. As your experience
with the card grows, these lenders will often raise your limit without
requiring you to increase your deposit. Eventually, you can use your experience
with this lender to apply for cards that are not secured.
Student Credit Cards
If you are a student, then you'll be best
off with a student credit card. Student
credit cards can be a great way of building the credit history that
you will need to depend upon after graduation. The important thing here
is to remember to use that opportunity wisely. Many banks will issue college
students a credit card, especially banks that are located in college or
university cities and towns.
When you do manage to get a credit card,
remember that you are establishing a credit history. Show that you are
a good financial risk by paying the bill on time. Don't go crazy with the
spending. It will only cause you problems in the future.
Author-Bio: Keith Baxter
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