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How to apply for credit with no credit

How to apply for a credit card
How to apply for a credit card © NAS CRETIVES/Shutterstock.com

This is the easiest type of credit to get without having past credit. There are three basic ways to start building credit.

1. Become an authorized user on a credit card belonging to a family member or friend. You can't be denied because there is no application process, says John Ulzheimer, credit expert for CreditSesame.com.

The primary cardholder simply adds you as an authorized user and you get your own credit card with your name on it. The account and payment history will be reported to the credit bureaus, populating your newly created credit reports. The other advantage, says Ulzheimer? You have no legal obligation to pay the debt on the card.

2. Ask someone to co-sign to help you qualify. That means you and your co-signer are liable for the debt. If someone doesn't pay it, each person's credit linked to the account gets dinged.

3. Get a secured credit card. These cards require a security deposit that acts as collateral against your credit line. The amount of the deposit, typically between $300 and $500, equals the credit limit.

"Usability is an issue with secured cards because the credit limits are generally extremely low," says Ulzheimer, "unless you are able to make a large deposit with the bank."

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