How does my girlfriend get a credit card if she has no credit?
May 22, 2010 7:14 AM Subscribe
How does my girlfriend get a credit card if she has no credit?
My girlfriend (who is over 21) has been trying to get a credit card. She has no credit at all (and nothing negative either) and was declined from a Citi Student Visa as well as a Visa through her bank (which she has a 5 year history). She has a good amount of income. I'm imagining it's these new laws that are making it so hard (I had no problem getting a Citi Student Visa with no credit or income). What is the next thing to try? I know she doesn't want to keep applying and getting denied because that looks bad on your report.
My girlfriend (who is over 21) has been trying to get a credit card. She has no credit at all (and nothing negative either) and was declined from a Citi Student Visa as well as a Visa through her bank (which she has a 5 year history). She has a good amount of income. I'm imagining it's these new laws that are making it so hard (I had no problem getting a Citi Student Visa with no credit or income). What is the next thing to try? I know she doesn't want to keep applying and getting denied because that looks bad on your report.
When I had no credit I joined a credit union and got a secured credit card. I gave them $200, and they gave me a visa with a $200 limit. Not all credit unions offer this, but I know many do. I used it for about six months, spending 50-100 a month on it and paying off in full each month. At the end of that time I was able to get a regular capital one card.
posted by Nothing at 7:20 AM on May 22, 2010
posted by Nothing at 7:20 AM on May 22, 2010
I don't know if things have changed since the Global Credit Hissyfit, but banks used to offer "secured" credit cards, in which you make a deposit of between 200-500 dollars and get a credit card with a line of credit equal to the amount deposited. After making payments on time for 6 months or so, the deposit is returned, and the line of credit remains open, like a standard credit card. I know Bank of America used to offer them to people with literally no credit all the time.
posted by Rock Steady at 7:21 AM on May 22, 2010
posted by Rock Steady at 7:21 AM on May 22, 2010
(I should make it clear, in case it was not, that when you close the secured account you get the deposit back.)
posted by Nothing at 7:22 AM on May 22, 2010
posted by Nothing at 7:22 AM on May 22, 2010
One way to establish credit is to apply for specific credit cards for specific stores. For example, Sears, Old Navy, Dress Barn or Target. In my experience they seem a little easier to get because you can only buy their stuff with their cards - not a vacation in Vegas like you can with a Visa or Mastercard.
Have her spend a few months establishing herself on these types of cards (buy some things and pay them off) and then try again with the bigger CC companies.
posted by NoraCharles at 7:27 AM on May 22, 2010 [1 favorite]
Have her spend a few months establishing herself on these types of cards (buy some things and pay them off) and then try again with the bigger CC companies.
posted by NoraCharles at 7:27 AM on May 22, 2010 [1 favorite]
In addition to store cards, which is an excellent way to establish credit, she might try Capitol One.
posted by earlygrrl at 7:36 AM on May 22, 2010
posted by earlygrrl at 7:36 AM on May 22, 2010
Response by poster: NoraCharles: Do all store cards report to credit bureaus? I've heard they don't so, if that is true, what's the best way to find out which ones do?
posted by stevechemist at 7:36 AM on May 22, 2010
posted by stevechemist at 7:36 AM on May 22, 2010
When I got an Express (the clothing store) card I had very little credit. The cashier said that they have a program where if you give your student ID with the application, you were guaranteed to get the card. Their website confirms this as well
posted by rancidchickn at 7:37 AM on May 22, 2010
posted by rancidchickn at 7:37 AM on May 22, 2010
I've never heard that they don't. All the store cards I have show up on my credit report. Even the one I got for a one time purchase of furniture that I promptly paid off and have never used since.
If you're not sure, you can google the sites for some stores and see what each one does.
posted by NoraCharles at 7:39 AM on May 22, 2010
If you're not sure, you can google the sites for some stores and see what each one does.
posted by NoraCharles at 7:39 AM on May 22, 2010
I established credit by having my dad open a low balance credit card, and then add my name to it. It was nominally his, but I was the only one that used it, and since it had my name on it, ta-da, my own credit card.
posted by orville sash at 7:42 AM on May 22, 2010
posted by orville sash at 7:42 AM on May 22, 2010
Capital One would most likely approve her, they are geared towards people with bad (or in her case, zero) credit.
posted by Sufi at 7:44 AM on May 22, 2010
posted by Sufi at 7:44 AM on May 22, 2010
One way to establish credit is to apply for specific credit cards for specific stores. For example, Sears, Old Navy, Dress Barn or Target. In my experience they seem a little easier to get because you can only buy their stuff with their cards - not a vacation in Vegas like you can with a Visa or Mastercard.
Good advice--traditionally, this has been a good way to start developing a credit history. Back in the day, they'd make a call to verify income and open an account with a small limit, like $200. Establishing that the person has no credit history helps by showing there are no bad items following them around. (Back in the day, you could actually call and talk to a human being about it too, no idea if that's still possible. I wish it were, but I'm guessing not.)
You'd want to check that it is actually a store card you're applying for and not a branded Visa/MC. Last time I had a "Sears" card it was actually a branded Visa card with a Sears logo on it. I think the card Target is always trying to get me to apply for is also a branded Visa.
Stores I'd consider would include Penney's, Kohl's or Herberger's. List will vary in your area.
Most store cards like that will report: they have a business relationship with credit reporting agencies to both buy reports from them and supply histories.
Another outside possibility might be Home Depot (or if you're in the upper Midwest, the Menards "BIG" card). They should have an interest in bringing in small contractors who are just starting out as well as young adults in general, and developing them as customers. No idea how easy or tight they are in the current environment, though.
One downside is that some store cards will have monster interest rates and fees just like the problems with many Visa/MC cards. I had a World Market card when they were still in the Twin Cities--they had a big 21% rate. Since you'll have a low limit, that should be less of a problem--still good to be mindful, especially since cards of all types have been coming up with bizarro late fees and penalties lately.
It used to be a common promo for Penney's to give a free set of steak knives (for example) to new cardholders. Hey, free steak knives.
posted by gimonca at 8:14 AM on May 22, 2010
Good advice--traditionally, this has been a good way to start developing a credit history. Back in the day, they'd make a call to verify income and open an account with a small limit, like $200. Establishing that the person has no credit history helps by showing there are no bad items following them around. (Back in the day, you could actually call and talk to a human being about it too, no idea if that's still possible. I wish it were, but I'm guessing not.)
You'd want to check that it is actually a store card you're applying for and not a branded Visa/MC. Last time I had a "Sears" card it was actually a branded Visa card with a Sears logo on it. I think the card Target is always trying to get me to apply for is also a branded Visa.
Stores I'd consider would include Penney's, Kohl's or Herberger's. List will vary in your area.
Most store cards like that will report: they have a business relationship with credit reporting agencies to both buy reports from them and supply histories.
Another outside possibility might be Home Depot (or if you're in the upper Midwest, the Menards "BIG" card). They should have an interest in bringing in small contractors who are just starting out as well as young adults in general, and developing them as customers. No idea how easy or tight they are in the current environment, though.
One downside is that some store cards will have monster interest rates and fees just like the problems with many Visa/MC cards. I had a World Market card when they were still in the Twin Cities--they had a big 21% rate. Since you'll have a low limit, that should be less of a problem--still good to be mindful, especially since cards of all types have been coming up with bizarro late fees and penalties lately.
It used to be a common promo for Penney's to give a free set of steak knives (for example) to new cardholders. Hey, free steak knives.
posted by gimonca at 8:14 AM on May 22, 2010
Some utility companies report to the credit agencies. I established a credit rating just by having a power bill in my name for 2 years. The easiest way I know? Buy a car through a credit union loan. They won't turn you down for no credit history and paying off a car on time will give you credit sufficient to buy a house. To my mind, that's the sum of what credit is useful for anyway.
posted by TeatimeGrommit at 8:34 AM on May 22, 2010
posted by TeatimeGrommit at 8:34 AM on May 22, 2010
I would suggest applying for a Target store card. For me, it's an easy card to use and pay off every month, since I'm in there all the time anyway. I've never heard anything negative about them, either, and they also have a Target Visa card, which she could apply for later. Oh, and Target more than tripled my credit limit after a year, smack in the middle of the worst of this recession.
posted by MexicanYenta at 9:03 AM on May 22, 2010
posted by MexicanYenta at 9:03 AM on May 22, 2010
In 2003, when I tried to get my first card, I listened to my elders and tried to get a store one. It won't work. They all rely on one having a credit history. A secured card is the way to go. There's this Consumerist thread on it from February that might help.
posted by cobaltnine at 9:52 AM on May 22, 2010 [1 favorite]
posted by cobaltnine at 9:52 AM on May 22, 2010 [1 favorite]
I was in the same situation (except that I had actually had a negative mark on my credit record, from a medical billing mistake that was never fixed, ugh), and I got a Target store card with a $200 limit (note: for every $1000 you spend at Target, they send you a coupon for 10% off a day's purchases, so these cards are extremely useful if you go to Target with any regularity). Then a short while later, Upromise gave me a real credit card. My credit score/report gets increasingly better with time, plus I get a little bit of money automagically going into paying off my student loans when using the Upromise card.
posted by so_gracefully at 10:41 AM on May 22, 2010
posted by so_gracefully at 10:41 AM on May 22, 2010
Did you have her check her credit report? Perhaps there's something on there that's causing a problem. It's free from annualcreditreport.com
posted by meta_eli at 11:02 AM on May 22, 2010 [1 favorite]
posted by meta_eli at 11:02 AM on May 22, 2010 [1 favorite]
Have her ask her parents if they will open a joint account with her. After about a year, if the account remains in good standing, she can remove her parents from the account and have her very own credit card. Or she can close the account and get a new one.
posted by crush-onastick at 12:11 PM on May 22, 2010
posted by crush-onastick at 12:11 PM on May 22, 2010
A friend of mine got a Chevron card when he had zero credit -- I think they gave him like a $400 limit, and I thought it was better than a store card, because gas is something most people NEED, unlike things from Home Depot or Old Navy.
posted by rabbitrabbit at 1:27 PM on May 22, 2010
posted by rabbitrabbit at 1:27 PM on May 22, 2010
It may also be worth switching her cellphone to a contract. Regular payments on time will show up on her credit record and could help her case.
(At least, that's how it works in the UK—it may be different in the 'States.)
Getting a free credit report, as has been mentioned, also seems like a good idea. It's good to know what your potential creditors are working with.
posted by henryaj at 5:04 AM on May 23, 2010
(At least, that's how it works in the UK—it may be different in the 'States.)
Getting a free credit report, as has been mentioned, also seems like a good idea. It's good to know what your potential creditors are working with.
posted by henryaj at 5:04 AM on May 23, 2010
Response by poster: She checked her free credit report and the only thing there is her employment.
posted by stevechemist at 4:19 PM on May 23, 2010
posted by stevechemist at 4:19 PM on May 23, 2010
This thread is closed to new comments.
posted by tetralix at 7:17 AM on May 22, 2010