5 steps you can take when you have no credit history

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Building Credit History » 5 steps you can take when you have no credit history

5 steps you can take when you have no credit history

The content is accurate at the time of publication and is subject to change.
No credit history means that when credit bureaus like Experian try to pull out your history of past transactions, nothing turns up. This could be because you haven’t taken any credit cards in the past or insurance or loans. Therefore there is no financial transactions’ history that your creditors can find, when trying to take a decision on whether to lend you money or not. Here are some of the things that you can do in such a situation. Continue with no credit history You can make all your transactions in cash without really worrying about credit history. The issue with that is you wouldn’t be able to get loans from banks or credit cards, if you ever need them. Even auto insurance premiums depend on your credit history. In recent times, prospective employers too have started referring to the candidates’ credit history. So, it is ideal to take steps to build your credit history. Go for prepaid credit cards Prepaid credit cards can be used for online transactions as well as for payments in stores and restaurants, the same way as you use normal credit cards. The big difference though is that you buy prepaid cards by paying in advance. A part of what you have paid goes down as service charges and your available credit will be a percentage of what you have paid. If the fees and charges aren’t very high, prepaid cards are a good option especially for those who don’t want to spend beyond a certain limit, without their knowledge. Secured credit cards You can go for secured credit cards when you have some money to deposit in your account as security deposit. You can get secured credit cards at decent interest rates even without any credit history when you have a deposit in your bank account. You need to pay the bills on time. Otherwise, the creditor can claim the deposit from your account. No credit, credit cards Also known as no credit check, instant approval credit cards, these are cards offered by lenders who play the high risk game. In other words, the lenders take a chance with customers who have no credit history. In return they charge exorbitant interest rates and a whole lot of other fees as well. This is one of the few ways one can build their credit history, if all other avenues are closed. However, the main threat is that due to the fees and interest rates, your debt could grow exponentially unless you are careful about making payments on time. Get co-signors This is what works in case of student credit cards. When you have no credit history, you can get a friend or family member with good credit history to co-sign the credit card for you. They are vouching for you in a way and would be responsible for the debt if you don’t pay the bills on time. Moreover the credit history on such cards will also reflect usually on the credit history of the co-signors.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Top 5 Secured Credit Cards: November 2020 – Experts’ Choice

Top 5 Secured Credit Cards: November 2020 – Experts’ Choice

Posted: June 22, 2020

The COVID-19 pandemic has made significant changes not only in people’s lives and their financial standing but also in the entire financial sector of the U.S. We have collected the best secured card offers from our partners so that you can… Continue reading

Top 5 Soft Pull Credit Cards: November 2020 – Experts’ Choice

Top 5 Soft Pull Credit Cards: November 2020 – Experts’ Choice

Posted: June 3, 2020

When applying for a credit card, you definitely don’t want your credit score to go down. Here, you will find the best credit cards with a soft pull from our partners. An application for such cards won’t make changes to your credit history… Continue reading

Top 5 Store Credit Cards: November 2020 – Experts’ Choice

Top 5 Store Credit Cards: November 2020 – Experts’ Choice

Posted: May 30, 2020

We evaluated store credit cards offered by our partners to find the best store credit cards. They are often loaded with perks that will allow you to save on purchases at your favorite retailer. Plus, many store credit cards are available… Continue reading

You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!