How to Apply for a Credit Card If You Don’t Have a Credit Rating

Let’s say you’ve started your first job and want to open a credit card , but you don’t have a credit rating yet – or you have one, but it’s low. What are you doing? Fortunately, there are several alternatives.

Find a job first

Having a job is an important factor in getting approved for a credit card. When applying for a card, a financial institution first checks your credit score and your income.

You don’t always need a job to qualify, but you do need to show that you can pay off your credit card balance at the end of each month. Showing that you have a stable income is an important qualifying factor. Generally, the higher your income, the higher your credit limit will be.

Based on your income and your credit history, the bank will be able to decide what they are willing to give you. According to Taylor Tepper , a former writer and analyst at Bankrate.com , you most likely won’t be able to qualify for these high reward cards if you’re a first-time credit card holder. “The card they offer you will likely have a low credit balance, which will limit the amount of money you can spend on it.”

Apply for a student credit card

Getting a credit card meant for college students can be the first step to building a good credit score. Be sure to check the annual fees and interest rates before starting the application process. Also, check with your local credit union for card offers. Although small and local banks usually have higher interest rates, they are also more likely to accept your application.

Get a secured credit card

Using a secured credit card, you deposit money, which then serves as your credit limit. When choosing a card, make sure you pay attention to application fees, processing fees and annual fees. High commission cards can eat up your credit limit significantly.

“I am partial to secured credit cards, especially for people who have no real credit history, even if they have a decent income job. I think this is a good way to get into the credit space without causing damage, ”Tepper said.

Even though many sites discuss the best secured credit cards, there are many things to consider when choosing one of them. Tepper recommends paying less attention to bonuses and more to no annual fee and the lowest possible annual interest rate. “Look at local credit unions – they will likely have products with lower annual fees, lower interest rates, and no annual fees.”

Consider applying with a consultant

Applying with a co-director is one option to consider if you are under 21. By applying with a co-ruler – a parent, spouse, or family member – you will benefit from their good credit rating and history.

However, keep in mind that your partner will have access to your account and will be able to see your purchases and transactions. This can be good for you – you can count on this person to remind you to pay your balance on time and even help you financially, depending on your relationship.

Do not apply if you are not approved

If you have not received approval for a student credit card or secured credit card, do not continue to apply because each application will negatively affect your credit rating for a short time.

To avoid rejection, research ahead of time which card best suits your needs and your current financial situation.

You can simply automatically apply for a credit card with the same bank where you have a checking account. Instead, think about finding the right card, how to find the product that suits you best. “You can’t think in terms of banks – you have to think in terms of products ,” Tepper said. There are no real benefits to using the same bank you grew up with; More importantly, do your research and find which card is right for you.

If you don’t get approval, the card issuer will send you an email and explain why. “This probably means that you applied for a card with too many rewards, aimed at higher incomes or people with a longer credit history,” Tepper said.

This post was originally published in 2018 and was updated on May 14, 2020. Updates include the following: checked accuracy references and added additional resources, updated formatting to reflect the current style, changed the function image, and changed the order of paragraphs in the last section.

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