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How to Get Credit When You Have No Credit

Having established credit history, is a very important part of personal finance. With established credit an individual is able to purchase a car or a home. A very common question asked is how to get credit when you have no credit? It can be very challenging to establish a first line of credit. Some people think it is very difficult to obtain a credit card with no credit. This is simply not true.

How to get credit when you have no credit card

There are three main ways a person can get a credit card without having any prior credit history. Secured credit cards, student cards, and department store credit cards are ways in which a person can establish credit. In this article we will explain how a person can apply for credit in each of these three categories.

Do not apply for too many credit cards. Any time a person without established credit applies for credit cards for good credit they will get denied. The unfortunate consequence of applying for a credit card, would be a hard pull credit inquiry on your credit file. Having too many hard pulls on your credit file will prevent you from getting credit cards that have easier credit approval policies.

Credit card companies today often show a person what type of credit is needed to get approved for a particular credit card. Often times this information is listed near the name of the credit card offer.

How to Get Credit When You Have No Credit with Student Credit Cards

Student cards are the best way for young people who are in college to get a credit card. Most of these cards are major credit cards with no annual fee. In most cases a student needs to prove they are attending college. Students experience difficulties in getting approved for a student credit card when they have too many credit inquiries. The student can either wait six months or more to try and apply again, or they can apply for a secured credit card.

Popular Issuers of Student Credit Cards – Citibank, Capital One, and Discover Card

how to get credit when you have no credit - first credit card

How to Get Credit When You Have No Credit with Secured Credit Cards

Secured credit cards have easy credit card approval because a person will secure their credit card account against default with money they deposit. Often times, the credit line is equal to the amount of money deposited. On-time payment history is required to receive your deposit back.

It is important to review each secured credit card application thoroughly. Many secured credit cards have high fees associated with them. Always read the fine print of every secured credit card offer. Credit Fast recommends The Discover it® Secured Credit Card.

Popular Issuers of Secured Credit Cards – Discover Card and Capital One

How to Get Credit When You Have No Credit With Department Store Credit Cards

Many credit card articles written never write about department store credit cards. In general, some of the easiest credit cards to get approved for are ones that are issued by department stores. Normally, it is easier to get approved for a store card than it is to get approved for a major credit card. The important thing to know is you cannot apply for just any department store credit card. Department stores like JCPenney will sometimes send pre-approved credit offers in the mail to people with no established credit history.

Another way to get a department store credit card is through the shopping cart trick. Basically a person goes to the website of certain stores to obtain credit cards. As the name suggests, there is a trick to it. A person needs to follow a few simple steps. A Pre-approved credit card offer appears once all the steps are followed. When done correctly, no hard pull will appear on a person’s credit file. This is a great way to receive credit without receiving a credit inquiry.

Department store credit limits between $300 and $500 are approved for people with no credit. These credit limits will increase over time if a person makes regular on time monthly payments. Store cards are one of the best ways to establish credit, and they have no annual fees.

Basically how to get credit when you have no credit is to follow one of the three steps above. Once you receive a credit card(s) always pay your bill on time to establish positive credit history. In six short months you will begin to see that you have now established credit history and your credit score will start to grow.


Discover Secured Card No Annual Fee Best Bad Credit Card

approved discover secured card no annual feeThe Discover secured credit card is one of the best, if not best credit card for bad credit. This card is excellent for those individuals who have no credit, bad credit history, or have completed a bankruptcy. For a total refundable deposit of $200, an individual can establish a Discover secured credit card account. A customer needs to demonstrate responsible payment practices, and then the deposit is refunded

There is only one thing I don’t like about the Discover secured card. When you apply, Discover will do a hard pull inquiry on your credit file. I do think however, it is a small price to pay for an opportunity to rebuild credit. A hard pull credit inquiry will drop your credit score a few points, but a customer will recover from this drop when they begin to make on time monthly payments. In two years the credit inquiry will entirely disappear from the credit report.

I did however contact Discover in writing and asked them to reconsider this practice. I stated that since each account is secured with a deposit, a soft pull could be performed instead. Hopefully other people have communicated the same sentiment, and this practice of doing hard pulls can be discontinued.

The Discover Secured Credit Card is the Best Secured Credit Card

Despite Discover secured cards performing hard pulls, I still think that the benefits outweigh the negatives. That is why my review remains a five star review. I have found no other secured credit card that offers such a low refundable deposit, and has no other fees associated with it.

Why is The Discover it® Secured Credit Card Different?

Normally, when I review a secured credit card I give them low ratings. Most secured credit cards have fees associated with them. You must pay the secured deposit. There are other fees that must be paid.

Ranges on the fees of typical secured credit cards (fee types issued varies with each individual credit card company)

    • minimum security deposit: $300-$500
    • annual fee: $75-$125
    • one time processing fee: $75 – $100
    • authorized user fee: $20-$30

Benefits of Discover Secured Credit Cards

A key benefit of Discover secured cards is that you get FICO® credit score monitoring for free. As a cardholder, you have the ability to view your FICO credit score. You can view your positive progress, while monitoring for any fraudulent activity. This is such a great benefit when rebuilding credit. Identity theft will not only destroy any progress made in raising your credit score, but it is often very difficult to remove from your credit report. This service Discover card provides is excellent. You could learn sooner, when an unauthorized credit trade account is established in your name, or when someone is making fraudulent charges to your existing accounts. I do not know of any other secured credit card that offers this service at no cost.

The security deposit of the The Discover it® Secured Credit Card is refundable. The only thing the cardholder needs to do is to make monthly on time payments for seven months. It is at seven months that Discover will review your credit card account to see if you qualify to have your security deposit refunded. Discover will refund the security deposit if a customer shows responsible credit management across all open lines of credit. This review of credit trade accounts includes Discover card, other credit cards, and installment loans.

I’m writing this article to inform consumers with bad credit that there is a better way to start or rebuild credit. Take a moment to review the Discover it® Secured Credit Card to see if it is right for you. It may save you a lot of money.