Low or No Credit Score? What You Need to Know Before You Apply for Your First Credit Card

It’s the catch-22 of credit. If you want credit, you need to already have credit. So, where does that leave you, if you’re like the millions of Americans who are applying for their first credit card, but you have a low or no credit score?

Don’t fret. With a plan, you can start building or boosting your score. Start by taking these steps to get there:

  • Become an authorized user on someone’s credit card. Have a parent, relative or close friend with good credit? If so, you can ask them to add you as an authorized user to their credit card. If they agree, then your credit score can benefit if they have a good payment history on that account.
  • Get a secured credit card. Secured credit cards can help you boost or build your credit score. These cards work by having you provide a refundable deposit, just as you would when renting an apartment or home, and your payment history is reported to the credit bureaus.
  • Do your homework. Find out what the credit card’s annual fee is, what are the late fees, what is the APR, and when can that APR change. For example, did you enroll during a promotional period? If so, then you need to know when that period ends and what the APR will be.
  • Pay your bills, including rent, on time. Your payment history plays a key roll when calculating your credit score.

So, with a plan, you can start building or boosting your score so that you can get that first credit card. Just remember to keep your credit utilization ratio below 30% and pay your credit card bill on time.

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