To start your credit report fresh and improve credit score, you need a first-time credit card that has no credit history. Your credit score will improve over time if you do this correctly. The Ascent has compiled a list with the best credit card issuers for this type.
Get rewards for your first credit card
If you have no credit history or a bad credit score, you can apply for a Discover rewards credit card to help you build a good credit history. With no foreign transaction or annual fees, an unsecured card can be upgraded as long you pay your bills promptly. This card also waives the late payment penalty fee for the first time you use it.
Discover offers many rewards credit cards for people with different financial circumstances. Although some cards do not offer one-time bonuses they offer benefits such double cashback after the first year. This is a significant benefit, especially if you choose to use your card responsibly. You also get unlimited earning potential, flexible rewards redemption and 0% APR for fourteen months.
Discover lets you earn rewards for every purchase. The cash you receive can be used for statement credits, cash, or both. Your rewards can be redeemed online or over the phone. You don't need to redeem a minimum amount. Redeem your rewards for as much or as little as you like. You can also redeem all your rewards at once. You can redeem your rewards in cash in any amount that you like, provided you maintain good credit.
Secured credit cards
Secured credit cards can be a great way for you to build your credit history. You won't be denied for having derogatory marks on credit reports, unlike unsecured credit cards. This gives you a greater chance of approval and helps you avoid interest penalties that can really harm your score.
Secured cards also offer other benefits. Some have credit score tracking and rewards programs. Some also offer cash back incentives. You will receive a check at the close of the year with the rewards, which are usually less than 1%.
In order to qualify for a secured card, you need to put down a deposit, usually a few hundred or thousands of dollars, to secure the card. You may have to pay an annual fee which will reduce your available balance. For example, a $400 deposit can get you a $400 spending allowance, while a $75 annual fees will reduce that to $325.
Department store cards
Department stores offer credit card options to boost customer loyalty and increase their revenue. They also give credit card users incentives to shop at their stores, including cash back and other benefits. Before you apply for one of these cards, make sure you're aware of the qualifications for such a credit card.
Store credit cards are usually offered by department stores with low credit limits. The utilization rate of these cards can affect your credit score. This is because credit scoring models look at the utilization rate of your cards, so having a store card with a low credit limit can lower your score.
People with poor credit or no credit can get department store credit cards. These cards can be obtained quickly and offer many rewards. In order to apply, you need to be 18 years old and have good or fair credit. If you apply for a store credit card, even if you don't have a credit record, most will require you to submit a hard-check. Applying for a JCPenney creditcard will require you to provide information about income and housing costs.