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Build Your Credit with O1ne Mortgage

At O1ne Mortgage, we prioritize consumer credit and finance education. While we may reference our partners, our goal is to provide an objective view to help you make the best decisions. For any mortgage-related needs, feel free to call us at 213-732-3074.

Credit Cards for People With No Credit History

Opening a credit card is one of the quickest ways to build your credit, but your options may be limited if you don’t have an existing credit history. The good news is that there are other ways to show credit card issuers that you’re a responsible borrower.

Secured Credit Card

A secured credit card is similar to a regular credit card but requires a security deposit, usually the same amount as your credit limit. This deposit reduces the issuer’s risk, making secured credit cards easier to qualify for than traditional, unsecured credit cards. Responsible use of your card can help build your credit history and improve your credit score.

Store Card

Store credit cards are available through retailers and can be good for your credit if the store reports your payment activity to the credit bureaus. These cards often offer perks like discounts, rewards, and special financing options. However, they typically have lower credit limits and higher interest rates.

Student Card

Geared toward college students, student credit cards can be a good way to begin establishing credit. They work the same as regular credit cards but usually have lower credit limits. Eligibility criteria can vary, so you may need to meet income requirements or have some credit history to qualify.

How to Apply for a Credit Card

Every credit card issuer has its own eligibility requirements. Here are the general steps to apply for a credit card:

1. Check Your Credit Score: A higher score suggests that you’re a creditworthy borrower. If you have no credit history, starting with a secured credit card, store card, or student card can help you get started.
2. Choose the Right Credit Card for Your Needs: Consider what you’re looking for in a credit card, such as rewards, low fees, or introductory APR periods.
3. Compare Different Credit Cards: Shop around to find a card with the best terms and benefits for you.
4. Complete the Application: Getting prequalified can give you an idea of whether you’ll get approved. If you decide to move forward, complete a formal application online.

How to Establish Credit With a Credit Card

Once you have your credit card, follow these steps to establish good credit:

• Pay your bill on time: Your payment history is the most important factor in determining your credit score.
• Keep your balance low: Aim to pay off your balance in full every month.
• Use your credit card: Use it for regular expenses and pay off the balance in full when the bill comes due.
• Request a credit limit increase: If you’ve been paying your bill on time, your issuer might increase your credit limit, which can help boost your credit score.

What to Do if You’re Denied for a Credit Card

1. Understand Why You Were Denied: Review the adverse action letter to understand where you can improve your credit.
2. Appeal the Decision if Necessary: If you believe there’s been a mistake, ask the lender to reconsider their decision.
3. Take Steps to Improve Your Credit: Address any issues that led to the denial to improve your chances of approval in the future.

Alternative Ways to Build Credit

If you’re having difficulty being approved for a credit card, consider these options:

Become an Authorized User

Being added as an authorized user on someone else’s credit card can help you build credit. The original account holder is responsible for making payments, but their history of on-time payments can improve your credit history.

Consider a Credit-Builder Loan

A credit-builder loan places the balance in a savings account, and you make fixed monthly payments until the balance is paid. Paying your bill on time can improve your credit if those payments are reported to the credit bureaus.

Get Credit for Your Monthly Bills

Services like Experian Boost® allow you to add on-time payments for bills such as rent, utilities, and certain video streaming services to your credit report, which could instantly raise your credit score.

The Bottom Line

Getting a credit card with no credit history can be challenging but not impossible. Secured credit cards, student cards, and store cards are good places to start. After establishing a history of on-time payments and responsible credit usage, you can eventually move onto a traditional credit card. For any mortgage-related needs, call O1ne Mortgage at 213-732-3074.

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