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How to Make Credit Card Deals with No Credit History

2007-09-25

The lack of your credit history means much for credit card issuers. Starting out with no credit history is like looking for a job with no work experience. In other words, lenders want to be sure that you are trust-worthy. And here is a catch. For establishing a credit history you must have credit, and for getting credit you need credit history. Contradictory rules of credit card system may drive you mad. Don't give way to despair! You may start with less attractive but sure methods that allow building your credit history and applying for the best credit card deals. How can you do this?

First of all, you may become an authorized user of your parent's or friend's credit card. It's definitely a convenience for you. But make sure the lenders report your payment history to credit bureaus. Otherwise, you just waste your time.

It is quite possible to establish a good credit history for those who have a checking account. What should you do? Ask your bank for overdraft protection. It enables you to write a check for a larger amount of money that you have on the balance. But this amount cannot exceed the limit of your cash reserve. Since you pay off the debt, you improve your credit card report and other creditors may regard you as a reliable client.

Secured credit cards are also a good option for people with no credit history. It is a safe way to start. This type of card is guaranteed by a bank deposit. Let's say, you have $300 on your deposit in the bank, so your credit card limit will be $300. It means you cannot spend more than you have.

Usually, secured cards imply higher interest rates than major ones. Mind, your goal is a good credit score. As soon as you get it, choose a credit card deal with better options.

Among those who decide to make first credit card deals there are many students. Credit card issuers work out a special type of plastics, i.e. student credit cards. It's worth saying that credit companies are aware of the fact that very often this category of potential users has no credit history. So, these cards give you a chance to build a good credit history and to obtain enough experience.

You can also sign up for one of department store cards. These cards are easy to obtain, because they have lower credit limits and you can use them only at particular stores. Once your department store card is active, it is reported to credit bureaus. Don't regard these cards as free money. This is a means of building your credit history.

Another important factor that credit card companies take into consideration is your employment history. Lenders would like to see prosperous clients. Your full time work and steady income boost the likelihood of being approved.

Like it or not, building a credit history takes time. There is no universal shortcut to an excellent credit score in mere days or even months. Your credit history depends on a number of various factors like payment history and the length of the time you have used your card. One should be very patient to see the results of the efforts. Keep in mind, fortune favors the bold. No need to avoid credit card deals just because you have no credit history.