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What is a good first credit card?
Did you know that there are banks that specialize in extending Visa Credit Cards and MasterCard Credit Cards to individuals that are not currently using credit cards and need to establish a credit score? You can choose any bank to apply for a card but don't apply to more than one at a time, credit applications will show up on your credit report almost immediately, and remember that multiple rejections will make you look desperate for a credit card.
Can I Build Credit History as an Authorized User?
Yes, an authorized user can build credit history.
An authorized user is someone who is added to another person's credit card account and authorized by the principal cardholder to use that account. The authorized user receives a credit card with his name on it and is able to use the credit card as if it were his own.
Payment history for that credit card is now reported to both the principal cardholder's credit report as well as the authorized user's credit report, regardless of whether the history is good or bad. That means the authorized user's credit can benefit from the relationship, but it can also suffer if debt accumulates and payments are late or not made at all.
Reporting of payments only flows one way, however, and the authorized user's finances outside of the credit card they have in common will not affect the principal cardholder's credit.
Liability for all charges to the card, however, lies solely on the shoulders of the principal cardholder. Although damage can be done to the authorized user's credit rating, only the principal cardholder is legally obligated to paying the outstanding debt.
If your initial application does not land you a new credit card don`t fret, there are other options.
As soon as you establish a payment history will help you qualify down the road for the major credit cards. Apply to one, meaning either a department store or oil company, and see if you are approved. Wait a few months before applying for another card.
We recommend that you carry a small balance on the department store card or secured card at all times. This shows the credit companies that you can handle an outstanding balance. Remember always, it is vital that you stay up to date with all your statements. Late payments, missed payments or other payment problems will undo all your efforts to build a credit history to the point where you have ready access to credit.
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