How to Get a Credit Card With No Credit History
Find Banks That Will Approve You With No Credit
People with no credit often have the most difficult time getting approved for a credit card. That's because most credit card issuers require a credit score to approve a new credit card application. However, you won't have a credit score until you have at least one active account on your credit report for six months. Some credit card issuers realize that people have trouble getting a credit card for the first time and they've made credit cards specifically for people with no credit.
Make Sure You Have a Job
You must have sufficient income to repay your credit card balance, especially if you’re under age 21. The income you put on your credit card application must be your own – you can’t use the income of your parents, spouse, or other household members to qualify for a credit card unless you have reasonable access to that money.
Income limits vary depending on the credit card, but you must make at least enough money to repay your credit card balance each month. The higher your income, the better chance you have at getting approved for a credit card even though you don't have a credit score.
Pre-Qualify for a Credit Card
A few major credit card issuers have online pre-qualification that allow you see if there's a credit card available for your credit profile. These pre-qualifications are typically soft credit checks – meaning they won’t hurt your credit score or show up on your credit report when someone else checks your report.
If you eventually follow through with a credit card application, that hard inquiry will show up on your credit report and has the potential to lower your credit score.
Pre-qualifying for a credit card doesn’t guarantee approval. Other factors – like your income – could cause you to be denied for a credit card that you’ve pre-qualified for.
If you’re denied, you’ll get a letter in the mail that tells you the specific reason why. Use this information in the letter to decide what you want to do next.
Get a Student Credit Card
If you’re a student, you may qualify for a student credit card. These cards are designed for college students who may not have a large income or a credit history. To qualify, you may have to provide proof that you're enrolled in a qualified college or university. Choose carefully. Some student credit cards have high interest rates and lots of fees.
Apply for a Store Credit Card
Retail store credit cards have a reputation of approving credit card applications for people with no credit. You’re more likely to get approval from the "closed-loop cards that do not have a Visa or MasterCard brand. You won't be able to use the credit card outside that particular store, but it will give you a chance to jump start your credit history. Beware: retail store credit cards have low credit limits and high interest rates. Keep your balance low and pay off your balance to avoid paying a lot of interest.
Get a Secured Credit Card
There’s nothing wrong with having a secured credit card as long as you pick one that reports to the major credit bureaus and has few fees.
What makes a secured credit card different from other credit cards is that you make a security deposit to get a credit limit. Some secured credit cards come with lots of fees, but there are a few credit cards that keep fees to a minimum. If you don’t have enough money for a security deposit right away, you can spend a few months saving up for the security deposit. The Capital One Secured MasterCard has a minimum security deposit of $49, $99, or $200 for a $200 credit limit.
Get a Co-Signer
If you can’t get a credit card on your own, you may be able to take advantage of someone else’s good credit. You could get someone with a job and good credit to apply with you, but be aware that getting a credit card with a cosigner has drawbacks.
You have another person involved with your finances, watching your purchases, and making sure you pay the credit card. If you’re not responsible with the credit card, i.e. you miss payments or max out the card, the cosigner’s credit is affected, too. Think carefully before you get a credit card with someone else.
Avoid putting in a lot of credit card applications. If you’re turned down for a major credit card, even if it’s a student credit card, don’t keep applying. Instead, look for a store credit card or a secured credit card. Choose these credit cards ahead of time, so you’re not desperately searching for a credit card that will approve you.
Watch out for any credit card that guarantees approval without first checking your credit score. There’s probably a catch in the form of high fees or high interest rate or both.
A prepaid card is an alternative to a credit card but is only helpful if you don’t have a checking account and debit card. Prepaid cards don’t help you build a credit history. They simply let you make credit card-like transactions, like paying at the gas pump.
Once you're approved for a credit card, use it responsibly so you can qualify for better credit cards and loans in the future. Keep your balance low and pay your balance in full every month to build a good credit history.