Credit Card without Credit History: A Possibility

Wednesday, July 13, 2016

Many people wonder whether they can avail credit cards without having any credit history as there are hoards of consumers who want to lay their hands on credit cards for the first time in their lives. Having no credit history is sometimes akin to having a dismal credit rating. Credit history as a whole gives detailed information about a person’s debts and the repayment pattern followed by him. If there has been any kind of default or delay for the payment of loan installments, then such follies are taken into account, in order to determine the worthiness of a customer. People with awful credit history often have to pay high interest rates for getting any kind of loan, as banks and other lending institutions considers such applicants as high risk cases. People with poor credit history still have a chance of getting credit cards. But for people who do not have any kind of credit history can find it difficult to get credit cards. Here is a list of ways through which one can get credit cards despite having no credit history.

Credit card applications

Whenever somebody applies for a loan, their credit scores are checked as a part of the normal procedure. When credit scores are checked by financial institutions, then it can hamper your credit rating as checking the scores brings in a lot of negative impact. The credit rating agencies might assume that there is something wrong with your financial conduct due to which many people want to go through your credit scores. According to some experts, around two to five points gets deducted from a person’s credit rating, whenever somebody enquires about your credit rating. Therefore, it would be a good idea to apply for loans only when you are sure that it will get approved. This can be done by discussing your credit history beforehand with the lending institutions, so that you can get an idea whether it will be worth applying for a loan from that particular lender.

Anomaly in credit rating

There are various websites which can provide you with your current credit rating. It is important to have a record of your own credit rating so that you can ascertain whether it is free of errors. There have been a lot of cases where people’s credit ratings have taken a tip because of erroneous credit claims. Such errors need to be corrected quickly, to improve the status of your credit rating.

 Stick to your bank

In cases, where a person has an active savings account, then they need to apply for credit cards for that bank. People who have records of steady employment and have stayed at a particular residence for a long period of time, then bank mostly tend to consider you as a low risk applicant. Credit cards issued in such cases might have a very low limit. And it can be considered as a very good start for somebody who is scrounging around for a credit card with any credit history. One can start to build a good credit history by making payments on time, to improve their credit rating.

Secured credit card

Secured credit cards are considered to be one of the easiest ways of getting a credit card with a credit history. Secured credit cards can be used to build an impressive credit rating. Secured credit cards can be received through a bank with which you have a savings account. One needs to decide the amount of credit limit that he requires and deposit the same amount in the savings bank account, for getting a secured credit card. It should be remembered that the amount which is deposited in the bank as collateral cannot be used by you, till the credit card is being used. The collateral serves as a great way of reducing risks for the banks as that amount can be used if a customer fails to make his payments.

Owning a credit card has innumerable benefits but at the same time, one needs to realize the importance of possessing a good credit rating. The process of getting a credit card without any credit history might seem daunting to a lot of people. But if people are willing to go an extra mile to create an impeccable credit rating, then can utilize the advantages of a credit card.