Best starter credit cards with no credit history
What to look for in a starter credit card
These are the features to look for in starter credit cards.
- No excessive fees: Beginner credit cards shouldn’t be expensive, but some credit card companies charge all kinds of unnecessary fees. Ideally, your starter card will not have unavoidable annual or monthly fees. The card issuer should also not charge you for standard services, such as shopping or paying your bill online.
- Reports payments to the three credit bureaus: The main credit bureaus are Equifax, Experian, and TransUnion. Each collects information about you for a credit report, which is used to calculate your credit score. This means everyone has separate credit reports and scores with Equifax, Experian, and TransUnion. Since your credit score with each bureau is important, you should increase credit with each one. For that, you need a credit card that reports your payments on time to all three.
- Credit score monitoring: The best starter credit cards offer free credit score monitoring. With this service, you can no credit check one of your credit scores every month and see if it goes up. Credit monitoring tools also usually provide advice on what you can do to increase your credit score.
How can I get a credit card without credit?
If this is your first time getting a credit card, here’s how to open one without credit.
- Check out starter credit cards to create the right credit for your situation. If you are in college, student credit cards are a popular choice. If you have the money saved and can afford a deposit, secure credit cards are worth checking out.
- Decide which of these credit cards is right for you and click the “Apply Now” option on the card provider’s website.
- Fill out the request form with the required information.
- Submit the request and wait for a response.
After submitting a credit card application, you can get a response immediately. Sometimes the card issuer may need more time to review your request. In this case, you will usually receive a response by mail. You can also call the card issuer after a few days to see if there are any updates.
If your application is approved, you will receive your new credit card in the mail within seven to 10 business days. If your request is denied, the card issuer sends you a letter explaining why. You can call to request that the decision be overturned. Card issuers sometimes reconsider refusals.
Your other option is to shop around for other starter credit cards with no credit history. You might want to research the easiest credit card to get if you’re having trouble getting approved.
What do i need to open a starter credit card?
The only requirement for opening starter credit cards is constant income. Your income is what the card issuer examines to confirm that you will be able to pay your credit card bill and to determine an appropriate credit limit on your card.
Keep in mind that your reported income may include more than what you earn from a job. If you are at least 21 years old, you are allowed to report any income that you can reasonably expect. Here are some potential examples you could use when applying for credit cards to create credit:
- Income from a partner if you combined your finances
- Distributions from a trust fund
- Scholarships and grants
If you are under 21, you can use earned income, allowances, scholarships and grants.
To open a secured credit card, you must have enough money to pay the security deposit. Most secured credit cards for creating credit require a deposit of at least $ 200. However, some have smaller deposit requirements.
How can a credit card help me build credit?
A credit card can help you increase your credit because it impacts three important factors in your credit score:
- Payment history: Your payment record on time and behind your credit report.
- Credit utilization ratio: The amount of your available credit that you are using (for example, how close you are to maximizing your credit cards).
- Duration of credit history: How long have you used credit and the average age of your credit card accounts.
Your payment history has the biggest effect on your credit. Starter credit cards make it easy to build your payment history. Whenever you pay your credit card bill on the due date, the card issuer reports a payment on time. As your on-time payment record grows, your credit score gets better and better.
Your credit usage rate is simply all of your credit card balances (what you owe) combined, then divided by your combined credit limits. For example, if your card has a credit limit of $ 1,000 and you have a balance of $ 100, your credit usage is $ 100 (balance) / $ 1,000 (limit) = 0.10 = 10% . The longer you keep this ratio, the better (stay away from maximizing your credit cards). If you have a credit card and never have a balance greater than 20% of your credit limit, it positively impacts your credit.
Obviously, the length of your credit history is something you can only develop over time. By opening one of these no credit credit cards, you can “start the clock” and start building your credit history.
How to get the most out of your startup credit card
Once you’ve found the best starter credit card for building credit, follow these tips to maximize its benefits.
- Stick to a budget. Don’t spend more than you can afford – you don’t want to end up with onerous credit card debt.
- Pay your bill on time – and in full – every month. By paying on time, you build your payment history and increase your credit score. And by paying in full, you avoid credit card interest charges.
- Never let your credit card balance exceed 20% of your credit limit. If your card has a $ 1,000 credit limit, never exceed a balance of $ 200. This keeps your credit usage low and improves your credit score.
- Check your credit score every month. If your credit card isn’t showing your score, there are several free ways to get your credit score. Your score should increase steadily as you use your card and pay on time.
- Wait until you have a good credit score of 670 or higher before applying for a new credit card. Credit card applications can cause your credit rating to drop slightly. It’s best to focus on building credit first and wait until you qualify for the best credit cards before applying for a new one.
Credit cards for creating credit are a must for people with no credit history. Your first credit card with no credit history is essential in starting your credit report. If you use it correctly, you should see your credit score improve dramatically over the next year.