As the old saying goes, you have to have money to make money. The same thing can also be said for credit. If you don’t already have it, it can be very difficult to get it.
But you shouldn’t believe everything you hear. There are plenty of old sayings that just don’t apply anymore.
Access to credit is based on a number of factors, including ones you have no control over. Economic conditions, treasury interest rates and even the housing market can all be factors in whether a credit card company chooses to give you a card.
It wasn’t that long ago when the banks were giving out credit cards to anyone with a pulse. Of course, things have changed.
I think it’s time to dispel some of the myths about credit cards and talk about the ways you can get a credit card even if you’ve never had one. So here goes…
Myth 1: You can’t get a credit card if you’ve never had one.
Well, if this were true, no one would have ever been given a credit card. Right?
The fact is credit card issuers want to give out credit cards, but they want to ensure a cardholder is a good credit risk.
How do they do that? By checking their credit report.
There are ways to make yourself more attractive to a card issuer, which I’ll mention a little later.
Myth 2: No credit is better than bad credit.
In fact, credit card issuers treat bad credit and no credit about the same.
Someone with a poor credit score is a known credit risk, while someone with no credit whatsoever is an unknown credit risk – but still a risk.
What they really want to see is an improving credit score. If they pull a credit report that shows a gradual increase over six months or so, they are far more likely to issue a card.
“There are ways to build credit
that don’t involve credit cards.”
Myth 3: All credit cards are the same.
The truth is there are numerous types of credit cards, and some are easier to qualify for than others.
If you’re getting turned down for a credit card, it may be because you’re applying for a card that has stricter requirements.
Instead, try looking for cards that are designed for new cardholders. It may be you only qualify for a $300 credit line initially, but that’s a way to start building credit and eventually get the card you want.
There are ways to build your credit that don’t involve having a credit card.
If you pay rent, you can opt into Experian’s program that counts on-time rent payments as positive marks on your credit score. Just be sure to make those payments on time.
Try getting a store card. Store credit cards are a lot easier to qualify for and will help to establish or continue building a good credit score.
Remember, however, these cards typically have a higher interest rate, so go easy and pay them off each month.
If you don’t have your name on a utility bill for where you live, you should do this. Have your name added or even transferred into your name.
Many of these bills are reported to the credit bureaus and help to build your credit. Again, just be sure the payments are made on time.
There are ways to get a credit card even without ever having had one before. By doing some research and following these tips, you’ll soon find you have what the credit card companies are looking for.
In the meantime, best of luck and keep up working on building good credit.
Photo source: bridgebank.com