Those who have no credit history cannot let things be as it is forever. From employers to landlords, insurance providers to home loan lenders, everyone looks at your credit history before setting the terms and conditions. However, it is also very difficult to build your credit history when there is no credit file in your name. Although it is difficult for you to get credit cards and loans without a credit history, you have some options of credit from where you can make a humble beginning.
Prepaid visa cards are the best option for those with no credit history
. These cards offer the same benefits as normal credit cards including online purchases, getting rid of cash payments, rewards, cash back offers and also credit reporting to the credit bureaus. They also don’t pose the threat of late payments and over the limit fees. You get what you pay for minus the processing fee, which too could be waived off in some cases, depending upon the prepaid card you purchase. Prepaid cards can be obtained from retail chains and even gas stations and departmental stores. The two things you need to check are whether the credit will be reported for those cards and whether there are exorbitant charges levied on them.
Secured credit cards
Credit cards can also be acquired by paying security deposits, which come with added incentives like free direct deposits and bonuses for on-time payment deposits from time to time. You can extend your credit line to as much as $3000 with secured credit cards. As you make consistent payments over a period of time, you will be entitled to extension in credit line without increasing your security deposit either. These cards offer more favorable terms as the risk is lowered due to the security deposit.
There are many lenders that offer payday loans without any credit check as long as you have an income proof to show. Payday loans are loans ranging from a few hundred to a few thousand dollars, but on time payments will ensure that you have something to show for on your credit file to enhance your creditworthiness for future applications.
Instant credit cards
Not all credit card issuers look for credit history. Some cards are offered without credit checks or issuance fee. However, such credit cards are also accompanied by higher interest rates and higher penalties. Those with no credit history will be able to apply online for such cards and can be approved for the card almost immediately. However, caution needs to be exercised as far as using such cards and making on time monthly payments are concerned. Missing out on the payments could spell trouble for your credit score, even if you have managed to build something.
Credit cards with co-signors
You can also go for credit cards with a guarantee from a co-signor. Student cards are a good example. However, if you miss payments or incur penalties the bad credit will reflect on the credit file of your co-signor too.