For someone who has no credit history, trying to build their credit score can seem daunting. After all, if you don’t have credit to begin with, how can you persuade someone to issue you credit so you can begin building your score? It seems impossible until you realize that some credit card issuers have cards for people who haven’t begun to build their credit. And depending on what your goals are, the best credit cards for no credit history applicants can differ. For instance, you may want a credit card with rewards, or you may prefer one that reports to all the credit agencies so you can build your credit faster.
No matter if you’re in college and are thinking about your future, you’re further along in life and didn’t realize how important having a good credit score was or you’re a new credit card user, Benzinga has some tips for you below about how to use credit cards as a no credit program that will help build your credit score.
Best Overall: Capital One Platinum Credit Card
The Capital One Platinum Secured card is a great card for those who are building or rebuilding their credit. The card is designed to help people who suffer from no credit by providing a card they can use. Because Capital One reports all payment activity to the major credit reporting agencies, each time you make an on-time payment, your score will improve.
Best for Building Credit Fast: Open Sky Secured Visa®
The Open Sky Secured Visa® is a card for those who are serious about improving their credit score. The card issuer claims that after six months of on-time payments, you can request an increase in your credit line with no additional deposit, or you can be approved for an unsecured credit card.
This credit card issuer reports to all three credit reporting agencies every month, so paying on time will help you build or improve your credit score. Your credit line is equal to your deposit, so you can choose your credit line by depositing the amount you desire.
Best for Cash Back: Capital One Quicksilver Secured Cash Rewards Credit Card
The Capital One Quicksilver Secured Cash Rewards Card stands out in its class because it offers cash back on an unsecured card. You earn 1.5% on every penny you spend on this card, no matter what you purchase or when.
You will need to put up a deposit of $200 to gain access to a $200 credit line. This low credit line will make it difficult to keep your credit utilization low, but if you can do it for six months (with on-time payments), you may qualify for an increase. The credit card issuer reports to all three credit reporting agencies every month, making it that much easier to build your credit score.
Best for Perks: Citi® Secured Mastercard®
You will pay a security deposit that equals your line of credit, from $200 to $2,500, and once the account is closed and in good standing, the deposit will be returned to you. Plus, you can get help staying on track with Auto Pay and account alerts. You can also try flexible payment due dates and manage your account online at any time. Users also gain access to their FICO score online. Use the card wherever you see the Mastercard® logo.
Best for No Money to Start: Self Credit Builder+ Secured Visa®
While this is one way to save money for a credit card deposit, you should know that you can save money in a regular savings account without paying the fees required by Self. On the other hand, if you don’t have the willpower to save the money yourself, this could be a great way to get started on building your credit. The Self Credit Builder is one of the best credit cards for no credit.
Features to Look for in Best Credit Cards with no Credit History
When looking for the best credit cards for your situation, be sure to look at each of the following things to determine which card is best for you.
Credit Agency Reporting: When trying to build your credit, it’s important that the card issuer reports your on-time payments. Future creditors will look at your credit report to see how you handled other loans, and if they see that you made your payments on time, your odds of getting future credit will improve.
Interest Rates: Credit card APRs are variable, which means the rates go up as the prime rate does. That’s why you should try and get a credit card with the lowest rate possible, even if that means passing on some of the best credit cards for travel that have higher APRs.
Annual Fees: Why pay an annual fee if you don’t have to? Not all credit cards charge them, and if you can qualify for one that doesn’t, it will save you money.
Customer Support: When you have a question, you need to work with a credit card issuer that can get you an answer right away. Look for one that has multiple ways of contacting them at all hours of the day.
How to get Approved for a Credit Card With no Credit
You can take certain steps to improve your chances of being approved for a credit card.
- Good spending habits: Managing your finances is the first step to building your credit, and that’s done with daily habits such as keeping your spending in line.
- Take your job seriously: No one will extend you credit without a reliable source of income, and that’s why it’s important to make sure you have a steady job at all times.
- Build your credit score: It’s possible to build your credit even if you have no credit score or a bad one. Doing things like getting one of the cards listed above will go a long way in showing creditors that you’re serious about building your score.
- Know your score: If you don’t know your credit score, you can’t take care of it and help it grow. Be sure to check it often and contact the credit reporting agencies if you see a discrepancy.
How you can Improve Your Credit Score
You can do certain things to improve your credit score. Here are a few.
Use various forms of credit: Lenders want to see that you have diverse forms of credit on your report, so in addition to one of these credit cards, finance a car or other loan product to add that diversity.
Set up automatic payments: When you miss a payment, it dings your credit report. Avoid that by setting up automatic payments to make sure they’re always on time.
Pay off your debts: The more debt you have, the lower your credit score will be. Pay it off as soon as you can.
Understand your DTI: Your debt-to-income (DTI) ratio is a measurement of how much you earn compared to how much you owe. Learn what yours is, and work to lower it so you will be more financially appealing to lenders.
Frequently Asked Questions
Can you get approved for a credit card with no credit history?
It is possible to get a credit card with no credit history, but many times, you will have to put down a deposit with the card issuer.
What’s the easiest way to get a credit card with no credit?
To get a credit card with no credit, you should review the list above and determine which card best suits your needs. Then apply for the card and decide if you want to accept the terms.
What type of credit card can help someone who has never had credit build a positive credit history?
The best credit cards to help you build a credit history are the cards that report your on-time monthly payments to each of the three credit reporting agencies.
Can I build my credit at 18 with no credit?
Young people can build their credit. Start by applying for a credit card like the ones listed above, and then make your payments on time every month.
What credit score do you start off with?
Before a lender checks your score or offers you credit, you will not have a credit score. That’s good news because it means you will start with a clean slate and can build up your credit as you make on-time payments.