Credit cards for limited history

What Is Limited Credit History?

The length of time you have used credit counts for 15 percent of your credit score, according to the Motley Fool. Creditors feel more comfortable lending to people who have experience handling a loan. Because everyone starts without a credit history -- considered a "limited" credit history -- your first loan or credit card will probably have a low limit and a high interest rate.

A person with a limited credit history may have no record of a loan on their credit report. Alternatively, not using much credit can also count as a limited history, according to Experian. Having, say, a single credit card with a $1,500 limit for a year or two would likely make a lender think you do not have enough history handling borrowed money if you wanted a large loan for a house. Lenders look at patterns of fiscal responsibility in your credit report as much as the score. Part of a good history is a paying back large loans or having a lot of credit available, but not needing it.

Any credit history shorter than six months does not even receive a credit score, according to MSN Money Central. The length of time it takes to build an excellent score, somewhere above 700, depends on if you pay your bills on time and the variety of your loans. Actually getting a credit card or loan to build history will take work. The 2009 credit crisis tightened lenders standards; creditors did not mind a limited credit history when when credit was cheap and plentiful during the early part of the decade, but that changed.

You may have to start with a secured card -- where the bank requires some collateral before issuing a credit line. Cosigning a loan with someone who has excellent history gives you the same positive items on your report. Usually, only close relatives and friends agree to cosign a loan.

You want to start building credit early if you'd like to own big ticket items like houses, because most people purchase property with credit, not cash. A long an excellent credit history can help with other aspects in the financial world, such as getting low interest rates, cars loans and even background checks for employment.

Wells Fargo suggests that consumers hoping to build a credit history consider a secured credit card. Secured credit cards require you put up collateral, but unlike a prepaid debit card, on-time payments are reported to the credit rating agencies. You could also send copies of canceled rent checks to creditors to prove your ability to handle monthly charges. Retail store cards are easier to acquire than bank cards, but the FICO score model gives retail cards less weight.

You can get a instant good credit history if you someone puts your name on a join account. The history on a joint account will become yours, but both parties are responsible for repayment in case of default which could end up hurting you score. Alternatively, you can build a credit history by finding someone to cosign on a loan. Simply being authorized to use a credit card account does not help build credit.


Credit Cards for Limited Credit History

Limited credit cards are for people with a limited credit history or no credit history. If you are eligible for a limited credit credit card, the cards below might be the right choice for you. Select a card from our Advertisers and apply online fast and secure.

A credit score is a number generally between 300-850, based on a statistical analysis of a person's credit files. This score represents the credit worthiness of a person. A credit score is assigned to each individual, to rate how risky a borrower he or she is--the higher the score, the less risk the individual poses to creditors. In most cases, your credit score will determine whether you will be approved for a credit card.

A credit score is a number generally between 300-850, based on a statistical analysis of a person's credit files. This score represents the credit worthiness of a person. A credit score is assigned to each individual, to rate how risky a borrower he or she is--the higher the score, the less risk the individual poses to creditors. In most cases, your credit score will determine whether you will be approved for a credit card.

  1. Credit Scores range from 300-850, the higher the better.
  2. Most lenders base approval on your credit score.
  3. Higher Scores mean lower payments and better deals.
  4. Higher Scores mean Lower interest rates.
  5. Scores are determined by 5 main categories:
    • Payment History
    • Amounts Owed
    • Length of Credit History
    • Type of Credit Used
    • New Credit

Note: Credit scores are used to represent the creditworthiness of a person and may be one indicator to the credit type you are eligible for. However, credit score alone does not guarantee or imply approval for any credit card product.

*See the online credit card applications for details about terms and conditions of credit card offers. Reasonable efforts are made to maintain accurate information. However all credit card information is presented without warranty. When you click on the " Apply Now " button you can review the credit card terms and conditions on the credit card issuer's web site.


Credit card for people with limited history

I am new in this country and I want to build my credit. I am looking for the credit card do you have any recommendations of which credit card I should apply. My credit history is limited.

Thanks for help

haulingthescoreup 2009-02-02 13:40

Hi, welcome to the forums!

Bank of America secured card

A secured card from a local credit union

Possibly Capital One if you still travel overseas --they charge less (maybe none at all?) in foreign transaction fees.

Do realize that you will most likely have to do secured cards at first. But if you only get two or three and use them responsibly, you can probably get additional accounts after 6-9 months.

You might look for posts here by member wmarat. He came to the US from the former Soviet Union and Israel, and he's doing much better than many of us who have had credit a long time but didn't always treat it well!

strong_lady 2009-02-02 17:15

Hello and welcome.

Orchard bank is a wonderful credit card, I have it.

There is also a secured credit card called National City you have to call in the number and get the application for a secured credit card as they do not have it on their website. I have been told that the card is very ugly though ..lol

Hope this helps

wmarat 2009-02-02 18:55

I would recommend:

1. A secured CC with big national bank. I have very positive experience with BOA. YMMV

2. A secured/unsecured CC with local CU. If local CU offers a secured card, make sure they unsecure it after a while.

3. Establish relationship with big, national CU like PenFed or/and Alliant. ( They have best savings rates on certificates and best autoloan rates.). So you will be able to get their CC with decent CL in 1-2 years.

4. Cap 1. They do not charge FTF, which is very handy for international traveller, but right now they approve you for toy limit of $300 and probably wont grow with you. I would wait with Cap 1.

5. I would not apply for builders/rebuilders cards like Orchard, HSBC, Hooters etc. They usually have low CL, AF and wont grow with you.

6. Store card. Get store card which you'll use. I am very pleased with Macy's. I would not get GEMB cards, unless you know for sure you are going to use it. I have 3 GEMB cards: JCP, WalMart and PayPal Buyers Credit. I am about to close Walmart and Paypal. DW frequently shops in JCP and does not allow me to close JCP. BTW, Target denied me due to lack of credit history, so I use my Macy's Visa at Target.

7. Gas card. I would not get one. It is very inconvenient to look only for certain gas stattion. I would wait, and get PenFed CashBack card (5% back at any gas station).

I am new in this country and I want to build my credit. I am looking for the credit card do you have any recommendations of which credit card I should apply. My credit history is limited.

Thanks for help

wmarat 2009-02-02 18:57

Hi, welcome to the forums!

Bank of America secured card

A secured card from a local credit union

Possibly Capital One if you still travel overseas --they charge less (maybe none at all?) in foreign transaction fees.

Do realize that you will most likely have to do secured cards at first. But if you only get two or three and use them responsibly, you can probably get additional accounts after 6-9 months.

You might look for posts here by member wmarat. He came to the US from the former Soviet Union and Israel, and he's doing much better than many of us who have had credit a long time but didn't always treat it well!

Ulan 2009-02-02 20:03

I got a credit card from my bank after I had had an account with them for a year (with a debit dard). I guess I could have asked after 6 months or so I was told, but I didn't really care for my credit.

eddymvp 2009-02-02 20:11

My Mom came here just 3 months ago and with 3 months employment verication the local credit union gave her a CL of 500. Originally it was 2K since we put that her income was 20K a year, but she is only working part time and only make about 10K a year so they only give it to her for 500 with no annual fee. The local credit union is DCU.

Guardian 2009-02-02 21:01

Hello and welcome.

Orchard bank is a wonderful credit card, I have it.

There is also a secured credit card called National City you have to call in the number and get the application for a secured credit card as they do not have it on their website. I have been told that the card is very ugly though ..lol

Hope this helps

Orchard is good for building credit but keep in mind that you need to diversify as Orchard will not grow with you and the fees will eventually become a annoyance, the lack of CLI and high interest will be problem in the long run.

madzia 2009-02-02 21:28

Thank you for all your advise

Guardian 2009-02-03 12:46

Thank you for all your advise

You are welcome and good luck. Keep us posted if you can on how it goes.


Applying for Your First Credit Card

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Credit cards for limited history

It’s the classic catch-22. You can’t build credit without having credit, and you sometimes can’t get credit as a student without a credit history. So where do you start?

Nowadays, credit is required for almost everything from getting a cell phone, to renting an apartment and applying for a car or student loan. Fortunately, one of the best times to build credit is when you’re still in school. Here’s what you need to know when applying for your first credit card.

Apply for a student credit card

Your credit score is made up of a variety of factors. One of the most important factors is your credit history. If you are a student with a limited credit history, or currently have no debt or credit, you may not have a credit score because the credit bureaus have no way to gauge your ability to repay loans or pay your bills on time. However, contrary to what you may think, one of the best ways to build your credit history is to apply for and responsibly use a credit card.

“As a student applying for a credit card, you should be focused on using it responsibly to build your credit history,” says Christine Forman, a marketing director for Discover. “Handling credit responsibly now could help you to get lower interest rates in the future.”

Find the best credit card for you

It’s important to keep in mind that not all cards are the same. Each credit card comes with different rates, features, benefits and fees. If you plan to pay your balance in full every month, look to maximize your rewards with a student rewards card. With some student rewards cards, you can earn cash back on every purchase and more. Rewards caps or other exclusions may apply. If you think you will carry a balance, it’s important to look for a low interest credit card. Several student credit cards offer a 0% APR introductory offer for 6-8 months. This will help you pay off large purchases over time and avoid paying interest during the introductory period. Make sure to research all of your options to find a card offering the most benefits like a low interest rate, no annual fee, cash rewards and a reasonable credit limit. You should also pay close attention to the billing cycles to make sure you understand the payment policies so you can avoid any potential fees. Many student credit cards also offer free online financial tools to help you track and manage your spending.

“Discover has two student cards available—Discover it ® for students and Discover it ® Chrome for students—that both offer reward programs,” says Forman. “The Discover it ® chrome card for students gives 2% cash back at gas stations and restaurants up to $1,000 in combined purchases each quarter automatically and 1% cash back on all other purchases, while the Discover it ® card for students earns 5% cash back in rotating categories each quarter up to the quarterly maximum when activated and 1% cash back on all other purchases.”

Getting approved for a credit card

Typically, you must be at least 18 to apply for a credit card. If you are under 21, to get approved for a credit card, you must provide proof of your independent income or assets to show that you will be able to repay the amount you charge. Otherwise you will need to become an authorized user on your parent’s, guardian’s or another adult’s account who is over the age of 21. If you have a job, even if it’s part-time, you may have enough independent income to get approved for a student credit card on your own. However, it’s important to remember that it will be your full financial responsibility to pay the credit card bill every month.

If you are added as an authorized user on another person’s account, you can enjoy the benefits of using the card without the official financial responsibility of paying the credit card’s balance. In some cases, if you have an insufficient credit history or bad credit, becoming an authorized user can help you build credit because the account history may be reported on your credit report. But ensure that the person liable on the account keeps up with payments because negative reporting to the bureaus will appear on your credit report if you are an authorized user.

When a traditional card is not an option available to you, a secured credit card 1 can be a great solution to building the credit history you need to ultimately obtain a traditional credit card. A secured credit card requires that you put down a deposit. After that, the card works similarly to a traditional credit card and unlike prepaid or debit cards, allows you to build credit because your activity is reported to the credit bureaus.

Build or Rebuild Your Credit with Discover it ® Secured Card.


Credit Cards For Limited Or No Credit History

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