How to get a credit card with no credit history - and establish good credit in the process

Tips on how you can establish positive credit and get a credit card with little or no credit history

Credit card companies clamber to issue cards to college students that have no income and no credit history. How do these students get these cards and why do card companies issue them so freely? Well, it is possible to obtain a credit card without a credit history. Here’s how it can be done.

Ever been to a mall or store and see a young person, obviously a student, frivolously using a credit card? Probably left you wondering how that can be and you can’t get a card to save your life even though you have a decent income, didn’t it?

Believe it or not, one of the best ways to get a credit card is to already be in debt. This allows credit card companies to look at how you paid those bills if they reported to the three national credit-reporting bureaus. It is worth noting here that most mortgage payments and credit card payments are reported to these bureaus regularly. Monthly expenses like rent, utilities and even student loans, usually are not, unless you fail to pay once and then it gets reported as a negative very quickly. So while you may pay your rent and utilities faithfully, you receive no positive credit whatsoever for that reliability.

To answer the question above, credit cards for college students are issued freely because the card issuer is betting that mom or dad will bail them out if they get into trouble. This is sort of a virtual safety net for card companies.

Getting Started

It is a good idea to review a copy of your credit report on a regular basis. The three agencies (Transunion, Equifax and Experian) are bound by law to provide you with a free copy of your report once a year on request. After that, the reports cost about $9 or $10 each. In any event, get a copy, go over it and correct any errors or discrepancies before you apply for a card.

Now, try applying for a card at the bank where you have your account(s). Most will be willing to give you a low limit card if you are employed full time, haven’t written any bad checks or have been with the bank a long time. That limit can be ramped up as you pay the bill on time. If you have lived at your present address or worked at the same place for a long time, that’s in your favor.

If your bank doesn’t want to issue you a no credit credit card, you can always get a couple of department store cards (these are easy to get!) and build your history that way. Make sure you pay off the balance before the end of the billing period. A small bank loan would work just as well as long as the payments are reported to the credit bureaus.

First time cardholders normally do not qualify for lower rates. That won’t matter if the balance is paid each month. This avoids the finance charge entirely and you can always negotiate for a better rate after, say, six months of on time payments.

One mistake NOT to make is to apply for several cards simultaneously. Credit card issuers will see this and think the worst-that you will simply charge the limit and then not pay.

The Quick Way

The quickest way by far is to get a no credit history credit card is to apply for a secured card. This is a card that draws on an account that is pre-funded. This gives the card issuer a sense of security and you a credit history.

Every payment you make is being reported to the bureaus, so keep them up.

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