While no credit history is better than having bad credit, both situations can hold you back. No credit makes it harder to get a credit card, loans, and even rent an apartment. And if you’re approved for financing without a credit score, you’ll likely pay a higher rate compared to an applicant with good credit.
Thankfully, insufficient credit is fixable. Here’s what to do if you’re looking to build your credit history.
1. Apply for a secured credit card
Some people run into a unique challenge when establishing their credit history. It takes credit to build credit—but it’s often difficult to get approved with no prior credit history. As a result, some people apply for numerous credit cards, only to receive rejection after rejection.
The problem, though, isn’t that they’re applying with no history—but rather they’re applying for the wrong type of credit card.
One of the easiest ways to build credit from scratch is to apply for a secured credit card. These are issued by some financial institutions and require a security deposit. Secured credit cards are ideal because they don’t require a credit history.
This is how secured credit cards work: Complete an application and pay a security deposit. If you’re approved, you’re issued a credit card with a credit limit of equal amount. If you pay a $500 deposit, you’ll get a credit card with a $500 credit line.
This deposit isn’t prepayment for the credit card, though. So you’ll receive a monthly statement and you’re required to make minimum payments.
If you’re looking for a secured credit card, apply for the Chime Credit Builder Secured Visa® credit card. This card can help establish, build, or rebuild your credit with no annual fees, no interest~, no credit check, and no minimum security deposit,² which is required with most secured credit cards. (Chime Checking Account and $200 qualifying direct deposit required to apply.¹)
But Chime doesn’t only offer the Credit Builder Secured Visa® credit card. Chime is an award-winning financial app & debit card that millions of Americans use to manage, save, and spend their money. It can provide you with resources to make smart money moves that promote financial well-being and a general sense of peace of mind.
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