Credit is not something you are automatically born with. It is something you need to learn how to build on your own. The best way to build your credit is by getting approved for credit cards. But, hey! How do you get approved for credit cards without credit? Stay tuned for a couple of tricks on how to get approved for a first credit card.
Authorized User (Piggy Backing)
The most common way, and by far the best way, of getting approved for a first credit card is by being added as an authorized user to your parent’s, spouse’s, or friend’s credit card. This is called piggybacking.
It works as follows:
Once you’re added as an AU (authorized user) on someone else’s account, the credit card company will report the credit card on your report to the 3 credit bureaus with all the credit history. So let’s say you’re added as an AU to a credit card account that was opened 10 years ago, suddenly your credit report will show that you have already built credit for 10 years! Now, this may sound funny, but it’s just a fact!
Not every bank will report an AU to the credit bureau, and not all report the complete history (back dates).
Check out this list:
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Get yourself added as an AU to one or two credit cards that are open for at least two years and have a perfect payment history. The AU will show on your report after about 30 days (you can check on Credit Karma and see when it shows already). And then you will be able to get approved for a low-end credit card try a Discover It or a Capital One Journey as my past experience was that they are more likely to approve you.
Keep in mind that the same way the good credit history gets reported so does the bad. Therefore, do not add yourself as an AU to any card that has any delinquent payments or high balances. It will do you more harm than good.
When being added as an authorized user try to use your own address not the primary address as the address used will be the address that will show up on your credit report.
Secured Credit Card
Give me your money, and when you need it, I will lend it to you. This is what some banks do. They offer you an option of a secure credit card, for which they ask a deposit of about $500. They then approve you for a credit card for the same $500. So, basically they are lending you your own money.
People don’t like this option, because first of all, you need to lock up the deposit. Second, because a lot of people don’t even get approved for a secured card either (if you have a banking relationship with that bank then you up your chances of getting approved).
So even if the AU way is probably better and easier, the secure credit card option is also a solid way for getting started on building credit.
Check out the best secured card options here
Banks like their clients (especially the good ones) and they want their clients to like them back. So if you have a good banking relationship with a specific bank they may approve you for a credit card, because as a client they want to give you a fair chance to prove yourself positive.
What is considered a good banking relationship? We are talking of $10,000 plus in your account, but at times even $1500 will do the trick.
It is worthwhile to give your bank a try. Even if you get declined, you’d want to call up and ask if you can be reconsidered. Tell the representative that you have a good banking relationship with the bank so if they can please recognize that by giving you a chance of proving yourself to be a good customer (In the past if the first representative did not want to approve me, I called again and again until I found a representative that was ready to approve me).
Bank Of America, Chase, and Wells Fargo are known to take into consideration a client’s banking relationship and help their chance of getting approved for their credit cards.
My experience was best with Chase Freedom Student. So, if you have a Chase account definitely give it a try. Again, if you get declined, try calling Chase Lending Services at 1-800-453-9719 to see if you can be reconsidered.
A store card is a credit card offered by a store or brand, for example, Gap, Kohl’s, Home Depot, etc. The credit card is designed to be used for purchases within the store. Store cards often come with many store-related perks, for example, discounts, bonus points on store purchases, free returns, and more. Many store credit cards can be used just like any other credit card for purchases outside of the store network as well.
Store cards are usually easy to get approved for even for newcomers to credit. But, you will usually only get approved for a shallow credit limit (sometimes as low as $200), and they often come with a very high APR on balances.
Store cards can be a good start. But keep in mind that store cards are not counted by FICO as a regular credit card, and in the long run, will not help build credit as much as a regular credit card. So after having the store card for a few months, make sure to get yourself approved for one or two typical credit cards as well.
As of this writing, ONLY Us Bank and Bank Of America offer the option of getting a joint credit card account, which is basically having someone with good credit cosign your credit card. This option is probably best only if all the options above failed (I don’t think this will happen. But, hey! You just never know).
Good luck on getting approved for a first credit card; Keep coming back to The Help Me Build Credit Blog to read and learn how to build and maintain great credit!
You may also want to see: 5 Easy Credit Cards To Get Approved For
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