How to get a credit card with no credit

If you have bad credit or no credit history, opening a new credit card can be tough. Credit card companies have certain requirements an applicant must meet to qualify for a new account. And in many cases, a good to excellent credit score is a must.

But there are ways to open a new credit card with bad credit or no credit. You just need to choose the right credit-building card for you and leverage your responsible use of credit into a traditional credit card in the future.

How to get a credit card with no credit history

When you begin your credit-building journey, it’s smart to be selective about the number of credit card applications you submit and which cards you choose.

Top rewards credit cards that offer cash back, points or miles may catch your eye, but many of these cards require good to excellent credit. Applying for these cards and getting rejected can do your credit more harm than good.

So if you have no credit history or have made credit missteps in the past, it’s best to focus on credit cards that are easier to get when you’re building or rebuilding credit. Your options include:

• Secured credit cards: Many credit card companies offer secured credit cards to consumers with no credit or bad credit. You qualify for this type of credit card by making a security deposit with the card issuer. The size of the deposit is often, but not always, equal to the credit limit on your new card.
• Unsecured cards for those new to credit: Student credit cards and credit cards designed for other new credit card users may be another smart option for a first credit card. Such cards may feature benefits like a $0 annual fee and modest rewards. It’s important to review the card requirements before you apply to make sure the offer is a good match for you.
• Second chance credit cards: These unsecured credit cards for bad credit or no credit offer the chance to rebuild credit without putting down a security deposit. Some second chance credit cards charge an annual fee, but there are no-annual-fee options. And some of these cards may offer limited rewards.
• Retail store credit cards: While retail store cards can have high interest rates and other big drawbacks, they can offer a good way to build credit. It is sometimes easier to get approved for a retail card than a standard credit card, and you can buy small items and pay your balance in full every month to build credit.

Can you get a credit card with bad credit?

You can get a credit card with a bad credit score, but your options may be limited. For example, you may need to get a card with higher fees, a lower credit limit and no (or limited) rewards.

Many of the best credit cards for bad credit are secured credit cards. Making the required security deposit reduces the risk of extending credit and allows the issuing bank to overlook your past credit issues or lack of credit history. While no one wants their money tied up with a credit card issuer, many of these cards require a deposit of less than $100 that gets returned when you prove you can use credit responsibly.

What is bad credit?

Credit scores range from 300 (the lowest credit score you can have) to 850. FICO and VantageScore break their credit scores down into different risk categories, such as excellent, good, fair and poor.

In general, a credit score ranging from 300 to 600 is considered poor, but this varies based on the scoring system. Here’s a closer look at the FICO Score and VantageScore credit score ranges and ratings.

FICO SCORE RANGE	CREDIT SCORE RATING
800-850	Exceptional
740-799	Very Good
670-739	Good
580-669	Fair
300-579	Poor

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VANTAGESCORE CREDIT SCORE RANGE	CREDIT SCORE RATING
781-850	Excellent
661-780	Good
601-660	Fair
500-600	Poor

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How to manage your credit card

When you open a new credit card, it’s important to use it responsibly so you can establish good credit over time. Here are three rules to follow for building or repairing your credit.

1. Always pay your credit card bill on time. Late or missed payments can do severe damage to your credit scores, cost you money in late fees and even cause the issuer to close your account. In contrast, paying on time every time builds a positive credit track record.
2. Pay your statement balance in full each month. Carrying a balance from month to month can rack up expensive interest charges that get tacked onto your bill. This can cause you to accrue debt, which can lead to credit problems. But paying your bill in full every month can help you to stay in control of your finances. It also can give you a credit score boost by lowering your credit utilization ratio, the amount of available credit you’re using at any given time.
3. Keep your credit card account open. Closing a credit card account hastily can ding your credit score. But keeping multiple credit card accounts open can benefit your credit in several ways. Open accounts increase the total amount of credit you have available and may increase your length of credit history, which can boost your credit score.

Helpful tips for building credit

In addition to managing your credit card wisely with on-time payments and a low credit utilization rate, the five tips below can help you avoid pitfalls on your credit-building journey.

• Choose the right secured card for you. Secured credit cards can help you build your credit, but some charge sky-high fees or don’t help you build credit by reporting your on-time payments and other account activity. Be sure to choose a card from an issuer that reports to all three credit bureaus. And look for a card that can convert to an unsecured card after you build a track record of managing your credit well. This way, the account will stay open, continuing to help build your positive credit history. The timeframe to move to an unsecured card can range from months to a year or more depending on the card, so check on that before you apply.
• Keep an eye on your credit reports. Be sure to review your credit reports from all three credit bureaus as you work to establish or rebuild credit. This can help you to monitor your credit-building progress and catch credit errors and signs of fraud that can unfairly tarnish your credit history.
• Dispute credit errors or fraud. If you discover mistakes on your credit report, or signs of fraud or identity theft, it’s important to take action right away. The Fair Credit Reporting Act (FCRA) gives you the right to dispute inaccurate information on your credit reports for free so you can get it corrected in a timely manner.
• Get credit for utilities and rent: Another way to build credit fast is to get credit for bills you’re already paying, like rent and utilities. These non-debt accounts don’t impact your credit, but services like Experian Boost allow you to add eligible bills to your credit report,though often with just one credit bureau and not all three.
• Become an authorized user: One simple way to build credit is to ask a family member or friend to add you to an existing credit card as an authorized user, essentially giving you permission to use the card. This does not require a credit check and will likely add the account to your credit reports, giving you credit for the cardholder’s responsible use of the card. It’s important to make sure the card has an on-time payment history and a low balance. Otherwise, this move could backfire and negatively impact your credit.

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Frequently asked questions (FAQs)