Best Starter Credit Cards If You Have No Credit History

Why does credit history matter?

Your credit score and history show lenders whether you are trustworthy with your money, like if you’re likely to pay your bills on time. This helps them determine if they’re willing to risk loaning you money.

Your credit history starts the second you open a credit card or take out a loan, and it will then continue to grow with new account openings.

Having a credit history can make a big difference in your credit score. Creditors look for two main things: how long you’ve been using credit and the type of credit. The length of your credit history accounts for 15% of your FICO score, while a mix of your credit accounts makes up 10%.

These are the factors that go into determining your credit score:

• Payment history: 35%— Your payment history makes up most of your credit score. If you make on-time payments consistently, your credit score will positively reflect this.
• Amount owed: 30%— Your total debt on all credit accounts (incl. credit cards, loans, etc.). Consistently paying off your credit account balances on time keeps this category in check and helps you to grow and maintain a good credit score.
• Length of credit history: 15%— How long your credit accounts have been open and active. A longer credit history can positively affect your credit score.
• New credit: 10%— New accounts you’ve opened and any hard inquiries on your credit report. Applying for a new credit line can temporarily damage your credit score.
• Credit mix: 10%— Types of credit accounts you maintain, such as credit cards, mortgages, loans, etc. Maintaining multiple types of accounts well can positively impact your credit score.

How long your accounts have been open can directly impact your credit score. While it’s true that it may not be the most important factor when scoring your credit, having a long history of keeping up with cards and loans can make you more trustworthy when borrowing money.

Credit scoring agencies get the information they need to analyze your credit report from the three main national credit reporting companies: TransUnion, Experian, and Equifax. The detailed record of your financial history is called your credit report.

Who should get a credit card for no credit?

There are various reasons someone may benefit from a credit card for no credit. Credit cards are a big responsibility, so it’s important to understand how credit cards work before committing to your first card.

Students & young adults

College is a great time for students to begin building their credit history, and there are a variety of credit cards to help them do just that. Read more in our guide to the best student credit cards.

Young adult credit cards are ideal for those who aren’t in college but want to start building their credit history to help benefit their future. Note, however, that you must be 18 or older to become a primary credit account holder, and if you’re under 21, you need to either show proof of independent income or have a co-signer.

Immigrants

If you’ve recently immigrated to the United States, you may want to start building a credit history as soon as possible. This will help you have a better chance of approval when looking to rent or purchase a home, borrow money, etc.

Credit beginners

It’s never too late to start building a credit history and it’s actually easier to build a positive history from the ground up than fixing a bad credit score. Ensure you understand how credit cards work, what different terms mean, and how to keep your credit score high so you don’t need to repair your score with a credit card for bad credit.

Establishing your credit history

You shouldn’t wait until you need to be approved for a home, car, or loan to consider your credit history. However, starting can be tricky. How can you prove you are a responsible card owner if you don’t qualify for most credit cards? Fortunately, beginner credit cards are meant for this!

Here are some tips as you’re starting to establish credit:

• Pay off your credit in full every month. This will help keep your interest rates low and FICO score high. Also, remember, you only pay interest if you carry a balance!
• Never let your balance exceed 30% of your available credit (learn more about your credit utilization ratio).
• Make sure your new card reports to all 3 major credit bureaus (Experian, Equifax and TransUnion)
• Keep an eye on your credit score and reports to make sure they stay in good shape.
• If you can’t get your own credit card yet, become an authorized user by having a family member who has good credit add you to their account. Doing this allows you to build your credit and access a line of credit.

Establishing credit is a marathon, not a sprint, so it’s good to start as soon as you can so you can enjoy the rewards.

What to look for in a first credit card

Those new to credit likely won’t be eligible for top-rated credit cards with hefty rewards, large sign-up bonuses, or the lowest interest rates. However, you can work your way up as you secure your credit history.

Your first credit card for no credit may be geared toward people with no history or low credit scores. However, some cards still provide rewards, no annual fees, and can be some of the easiest credit cards to get with no credit.

Things you should look for may include:

Applying for your first credit card with no credit

Established credit is an important factor when applying for a card.

Your options can be limited if you don’t have a credit history. Your credit history won’t necessarily prevent you from being able to get a card, but it will impact the cards that are available to you.

That is what starter credit cards are for! You can use these cards to build credit and raise your credit score. Some cards don’t require credit checks to qualify, making them easier to get.

When you first apply for a starter card, you may need certain information, depending on the card lender:

• Your name
• Your birthdate
• Social security number
• Evidence of income (this doesn’t necessarily have to be a job. If you have investments or a spouse’s income, these could qualify)
• Proof of rent or housing

Some credit cards will need more information, and some starter cards will accept less.

Make sure you don’t apply for too many cards, as credit card applications lead to a hard inquiry on your credit report, which can temporarily damage your credit score.