How to Get a Credit Card if You Have No Credit History

By Lynnette Khalfani-Cox, The Money Coach®

If you’ve been told that you have a “thin” credit file or perhaps no credit history at all, you may feel like you’re in a Catch-22 situation: You want credit, but it’s hard to get credit, simply because you’ve never had credit in the past.

If you’ve been told that you have a “thin” credit file or perhaps no credit history at all, you may feel like you’re in a Catch-22 situation: You want credit, but it’s hard to get credit, simply because you’ve never had credit in the past.

So, what should you do?

Start by seeking a credit card — one you can get approved for even if you have a limited or nonexistent credit history.

There are three main credit card options for those without a credit profile.

First: A secured credit card is available for nearly any consumer over age 18. With a secured card, you place a set amount of money on deposit with a financial institution, perhaps $250 or $500. In exchange, your deposit serves as your credit limit on a secured credit card. The card will look just like a regular, unsecured credit card and you will be able to use it in retail establishments as well as online.

Before you open a secured card, make sure that the secured card issuer reports your card payments to the credit bureaus. Not all secured card issuers do this.

Second: Get added as an authorized user on someone else’s credit card — perhaps a parent, a sibling or a spouse. As an authorized user, you can make charges on the credit card. As long as payments are made on time, you’ll both see a boost in your credit scores. Of course, the opposite is also true: any late payments impact both you and the primary user’s credit rating.

Again, make sure that the authorized card issuer reports your card payments to the credit bureaus.

Third: Shop around at sites like CardRatings.com, BankRate.com or CreditCards.com for cards tailored toward those with slim credit files or no credit at all. Examples include, credit cards designed for college students or cards that specifically say “no credit” needed to apply.

Getting a credit card, and paying the balance monthly, is one way to start establishing and building a positive credit rating.

 

 

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Extra Credit provides general information to help improve our Member’s financial lives. Every situation is different, so please contact us for guidance on your specific needs. The advice provided in Extra Credit is not intended to serve as a substitute for speaking to a loan representative, financial advisor, or GreenPath Financial Wellness counselor who can help tailor a solution for you.

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