Applying for a first credit card can have its complications – our guide can help with the preparation needed to build up your credit history
Credit card providers will always prefer to lend to established borrowers than first-timers. This is because first-time borrowers do not have a history of handling credit and paying off debt.
That shouldn’t deter consumers though, as a first credit card can be the platform to establishing a positive credit history and ensure that future attempts to access credit are less complicated.
Fortunately for first-time credit card applicants, more and more credit cards are being designed for those with bad credit and limited credit histories.
For consumers new to credit, the aim is to prove you can be trusted with credit, despite a lack of history in paying off debt.
You may have never acquired debt in your life and still face trouble getting a credit card, so it’s important to be prepared as any application rejections could further limit your chances of getting a credit card.
Our guide explains how to be prepared for getting your first credit card and the benefits of establishing a credit history.
Getting your first credit card
A common question people might ask is: how can you establish a credit history if no one has ever given you credit?
Credit reports can tell you what your situation is so you can find out once and for all if you’ll be accepted for a credit card. Some credit reporting products can also tell you what areas of your credit status you can improve on.
It may be worth doing that anyway, but there are other measures you should take and check before parting with your money for a credit report service.
Having your name on any utility bills such as gas and electricity or mobile phone bills can improve your score in credit card checks – unless you have a history of missing payments, of course.
Credit card providers are also wary of fraud and will assess the risk potential of every new client, especially one with little or no history of paying bills or having credit.
This means that if you’re not registered on the electoral roll in your area, it can be harder for credit card providers to confirm your address.
Similarly, if you keep moving address or have long periods of unemployment, that may also limit your opportunities as it could indicate to the lender that you are unreliable or a potential fraud threat.
Essentially, credit card providers only see your name against a series of bills along with your employment and living history, so on the personality front there isn’t much that can be done.
Getting your hands on your first credit card may require some preparation to ensure your credit history doesn’t get tainted with rejections
There is no arguing with a rejected credit card application, so make sure your financial circumstances that can be checked by lenders do not work against you.
First time credit card precautions
It could be worth applying for a credit card with the same issuer who provides your current account, as your history with them can work in your favour, but this is not guaranteed, so do carefully check their eligibility criteria first.
Similarly, you may be sent an email or letter in the post telling you that you have been pre-approved for a credit card. This is a marketing ploy used by credit card companies to reel in extra applications.
The information they base their marketing on could be years out-of-date or even entirely irrelevant to you, so you may still get rejected even if they claim that you are pre-approved.
Another precaution to take is to avoid falling for the instant decision trap. Credit card deals and marketing claiming to provide an instant decision can be attractive for consumers looking for their first credit card.
You could be thinking that you’ll know right away and get your first credit card quickly.
However, they could just as quickly reject you. More importantly, though, is that an instant decision is possible, not guaranteed. If your criteria clearly matches or obviously does not meet the requirements, then you could get an instant decision.
In many cases, you will not get an instant decision and if this is your first credit card, then it is more than likely that the credit card provider will need to access your credit report first and do a thorough check before accepting or rejecting your application.
Credit builder credit cards
The important thing is to be realistic about your chances as piles of rejected applications will only damage your credit status.
Credit builder cards are often marketed to people with bad credit histories, but there are some on the market that are aimed at those with no credit history, or people who’ve never had a credit card before.
The likelihood of getting a great credit card deal on your first credit card is slim but remember that your first credit card could be a stepping stone to better rates and perks, so take it one step at a time.
No credit history
Establishing a credit history can be difficult, especially if you’re unaware of what could taint your status and what actually appears on the report that providers see.
You may have no credit history because you’ve never needed credit before, which may seem like a paradox, but lenders want to see that you can handle credit debt.
Unfortunately, even if you’ve had a credit card but used it in your partner’s name, that’s unlikely to improve your chances.
Those who are new to the UK and those who’ve never had a UK credit card are also likely to be seen as new to credit cards in the UK.
Students and people starting their first jobs will also have a limited credit history, but there are credit cards for students, or at least designed to help them establish a credit history.
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