How to Obtain a Credit Card Without Credit
Many people with no credit history automatically assume that it will be too difficult to be approved for a credit card. While this may be a valid concern in some instances, there are many financial institutions that approve people with no credit on a regular basis. In fact, most people with a steady job can be approved for a credit card without credit, and some banks even send out offers specifically designed to solicit new customers who do not yet have a credit history.
Even so, there are many people who have trouble obtaining a credit card without credit, simply because they don’t know how to find the right cards and apply in the right manner. The following tips can help anyone obtain a credit card without credit.
Choose a Card and Stick With It
While it may seem beneficial to apply for as many credit cards as possible within a short period of time, that is actually one of the biggest mistakes made by individuals with no credit. Surprisingly, even being denied for a credit card application can be detrimental to one’s credit history, at least for the few months following the denial.
Even though being denied does not necessarily affect someone’s credit score directly, all denials are reported to credit reporting agencies and this information can then be obtained by prospective card companies and lenders. When financial institutions and potential creditors see a history of several denials within the same time period, they immediately assume that the applicant is desperate for cash and not financially stable. Thus, it is best to choose a single attractive credit card and apply with confidence.
What to Do After Denial
If someone is denied for a credit card, most people will simply apply for another. However, as mentioned this is not always the best solution, as it could simply lead to more denials. Instead, it may be best to apply for a secured card or a merchant credit card. Almost anyone can be approved for a secured credit card because the funds on the card are actually deposited by the account holder, meaning there is no risk for the bank.
However, it is important to note that some secured credit cards do not report to credit reporting agencies, which makes them useless for building credit. Nonetheless, it is possible to find a secured credit card or merchant card that does report to credit agencies and improve the card holder’s credit.
Re-Applying for a Good Credit Card
After making payments on time each month with a secured credit card or merchant card, the person’s credit score will gradually improve. Once the credit core reaches a reasonable number it’s time to repeat step one and apply for a new card. As long as late payments are avoided and a good credit history has been established, being approved the second time around should be a guarantee.