Credit card companies use a variety of tools to determine whether an individual is eligible for a credit card. One of these tools is a persons credit score. Your credit score is a reflection of the debt that you take on, along with your ability to pay bills and loans. Individuals who have no credit score, or a low score, may struggle to obtain high-end credit cards. But there are many available credit card options for individuals with no to low credit scores.
Obtaining a Credit Card With Low Credit
There is a difference between having no credit score and having a low figure. A low credit score usually indicates that a person had trouble paying off their previous debts. If your credit score is very low, you may still have outstanding debt obligations that you have not paid.
If you have deficient credit, then you are unlikely to get approval for any credit card. Companies do not want to take a risk on someone who had opportunities in the past and did not handle them in the best possible way.
But it does not mean that you can never own another credit card. There are secured credit cards available for people who have low credit scores. These cards require an upfront payment to establish a credit line.
Say you want a secured credit card with a $300 line of credit. You may be asked to make a $200 to $300 deposit. Then you make purchases and pay off your card each month, while the company increases your credit limit every few months. They also make positive reports to credit agencies, which can help bring up your credit score.
It may take a couple of years before you are eligible for a proper credit card, but rebuilding credit can take time.
Credit Card Possibilities for Newcomers to the United States
Individuals who recently moved to the U.S. for school or work would naturally want to obtain a credit card. There are two categories of people who arrive in the U.S. seeking a credit card – those who have credit established in their home countries and those who do not.
If you have a solid credit history in your home country, you can leverage that credit to obtain an appealing credit card in America. Whether you want a MasterCard, Visa, or American Express card, you can submit your credit documents from your home country to the relevant American credit card issuer, or go through professionals like those at Nova Credit that help immigrants sort out getting credit in the U.S.
Those individuals who do not have any credit history in their home country may have to start with basic credit cards that are designed for people who are starting out in the world of credit. Many credit card companies have offerings for students and professionals who are starting their first job.
Such cards may not have a very high credit limit or extensive rewards, but they are an excellent way to start building your credit history. If you want more details on the available options, you may want to check out a list of the best credit cards for individuals who do not have a significant credit history in the U.S.
Building Your Credit Score
The best way to ensure that you are eligible for the top credit cards in the future is to start building your credit history today. Whether you obtain a secured credit card or a newcomer card, paying off your balance on time is the best way to ensure you are improving your credit.
Whether you have one, two, or three credit cards, try to keep your balance on each card at a minimum. Not only does it ensure that you are avoiding interest payments, but it means that you are using up very little of your available credit. That is appealing to creditors, which means that it boosts your credit score.
It can be disheartening to know that you do not qualify for many available credit cards, but it is only a starting point. If you spend one or two years making regular payments on secured or starter credit cards, you will significantly improve your credit score to the point where you are eligible for those high-end cards.