Visitor Question: “I have tried applying to some of the credit cards that are on your credit card page with no luck. I never had a credit card before but I’d like to take advantage of the big sign-up bonuses, what can I do to get approved?”
Here are some ways you can build up your credit with no credit history:
1. Sign up for a secure credit card
Secure credit cards are made to help you build or improve your credit score. You can sign up for a secure credit card such as the USAA Secured Platinum Card.
A secure “credit card” works the same way as a “regular” Credit card. The main difference is, (besides for lack of bonuses and points) is that with a secured credit card you need to deposit the money upfront, It works similar to a Debit card. For example if you deposit $500, you’ll have credit line of $500, with your deposit securing your new credit card. When you close your account you’ll get the money back.
Secure credit cards will also usually charge you an annual fee. Some Secure credit cards will offer automatic credit line increases, others such as the USAA secure card, open a 2-year Certificate of Deposit (CD), an interest-earning deposit account with your initial deposit.
2. Sign up for “store” cards
You can sign-up for store cards such as Macy’s, Target, Kohl’s, Gap etc;. Store cards are easier to get then “regular” credit cards, as the stores are eager to give you their cards. Just note that it is a lot easier to get approved for a store card once you are an authorized user on someone’s account and have some basic credit history (see # 3.), although it’s not always a prerequisite.
3. Be added on as an authorized user
Being added as an authorized user on someone else’s credit card account, will link your credit report to the credit history of the credit card that you are an authorized user on.
You should try to be linked to an account that a.) has a long credit history, b.) has never missed a payment, and c.) uses a small amount of the overall credit limit allowed on their card.
For example, if someone has a credit limit on their credit card for $10,000 and they have a balance of $8,000, they are utilizing 80% of their credit limit which is very high, on the other hand if someone has a credit limit of $10,000 but only has a balance of $1000 they are only utilizing 10% of their overall credit limit which is good for the credit score.
Being added on as an authorized user is easy. The main card holder can add you on with a simple call to the credit card company or can even do it many times online. The main card holder will need to give your name and social security # to the credit card company and request that you be added on to their account.
4. Sign-up for easier to qualify credit cards
5. Make sure to take care of your credit
Once you have one of these cards mentioned, make sure to keep your credit history in tip-top shape by always paying your credit card on time.
6. Apply for the “good” cards
Congratulations! After about 6 months or so, of having these cards and paying your bills on time, you should have already built up your credit worthiness enough to start getting approved for the better credit card offers.
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