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No Credit Score? 7 Ways to Make Sure a Secured Credit Card Does the Trick

January 18th, 2016 · No Comments · Credit Scores

by Kristy Welsh

(Last Updated On: February 26, 2018)

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If you have no credit score, getting yourself a secured credit card is the easiest way to start building one. Here’s how to do it right.

1) Shop around for the right secured credit card for you.

Make sure it’s one that:

  • Someone with no credit history can qualify for
  • Reports activity to the credit bureaus
  • Is not a “prepaid debit card” as they do not report to the bureaus
  • Comes with as few fees as possible

You can compare cards on sites like BankRate and NerdWallet. We also have a list of secured credit cards we recommend.

2) Don’t apply for multiple cards at a time.

That doesn’t look good on your credit history. If you’re denied the first card you qualify for, dig deeper into your research to be sure your next application is for a card you qualify for (i.e., one for people with no credit history).

3) Don’t max it out.

Ideally, you don’t want to utilize more than 30 percent of your available credit at any one time. It’s called your credit utilization ratio. For instance, if your unsecured credit card is for $300, don’t charge more than $90 to it (i.e., return it to a zero balance before charging more).

4) Return your balance to zero every month.

The key is only charging as much as you can afford to pay off right away. Keeping your credit utilization ratio under 30 percent helps, as it is harder to get in over your head.

5) Make your payments on time, every time.

Your credit score can take a big hit from just one late payment, so do everything within your power to make timely payments. Again, the goal is to return your balance to zero every month but if you’re struggling to do that one month, at least make the minimum payment on time.

6) Use your credit card.

While it’s a surefire way to avoid debt, not using your card won’t do much of anything for your credit. The way to build your credit score is to prove you can use credit responsibly. And to do that, you have to use it.

7) Monitor your credit reports and score.

Again, you want to get a secured credit card that reports to the credit bureaus. With that comes your responsibility to make sure the activity being reported is accurate, as what’s on your credit reports determines your credit score.

You can get free copies of your credit reports through AnnualCreditReport.com, and you can purchase your FICO Score through myFICO.com. You can also monitor your credit for free all year long through sites likes Quizzle, Credit Karma, and Credit Sesame.

Learn more: Credit Scoring 101.

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