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I'm trying to get my first credit card solely to build a score, I don't need any loan or anything right now. For doing this, I applied to Chase two months ago (because I've had a debit card from them), and got a denial. After a little searching, I came to know that Chase is not giving credit card accounts for the first timers.

A month after that I talked to a Capital One representative and explained everything by saying "I don't have any credit score and I'm applying for the first time". And he recommended a Capital One Student Journey. After 2 weeks I got denied. The reason was no enough credit history! I guess that representative is new or doesn't know the stuff...

After calling them back and explaining everything, they told me I need to apply for secured credit card.

After researching little bit, I found that applying frequently can make a trouble for credit approval. How is this true? Does it apply to secured credit cards (and for the first time applicants)?

Can I apply for the secured one after applying twice in 2 months?

  • are you a student, do you have student loans, or any other credit items? – ChuckCottrill Dec 19 '13 at 22:43
  • @ChuckCottrill, Yes I'm a student but I don't have any student loans... or any type of loans yet. – user11125 Dec 20 '13 at 3:22
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It is true that too many credit pulls on your record will lower your score and chances of getting approved. It shows you as a desperate person seeking for debt ASAP, and it is not what you really are. Banks don't like desperate people seeking for debt ASAP, because bankruptcy is the next logical step for those people. Don't make yourself appear as you're in that category, its not good for your financial reputation.

Secured credit card is indeed the way to go for you, and is the most straightforward way to build credit if you don't have any or have a bad one.

Secured credit cards are much easier to get, since they're secured by a collateral (usually a CD you open with the issuing bank). Your credit limit is limited by the amount of that collateral, so the issuer doesn't actually extend you any credit and there's no risk for them. It is reported as credit on your report though, so it allows building credit history.

I wrote an article on my blog about building new credit, that addresses your situation exactly, you're welcome to browse through.

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    on a side note, trying to understand; What happens when someone who doesn't have any credit record, and there is an enquiry, does a record get created? or are there blank records for everyone with SSN? or its just reject, no record, in this case the number of pulls doesnt matter right? it will always come back no records ... – Dheer Dec 17 '13 at 8:48
  • @Dheer, I was writing the same question :). – user11125 Dec 17 '13 at 8:51
  • @littleadv, your answer and post are really informative! thank you! – user11125 Dec 17 '13 at 8:51
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    Great answer, great article. I personally would suggest people try to get their first credit cards / secured cards from a credit union rather than a bank. – MrChrister Dec 17 '13 at 15:06
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    @ula If you get a secured card you should triple-check that the issuer will indeed report your activity to the three credit bureaus. Some issuers will not do so, and some will only report to one of the bureaus. Then, after a few months of using your card, you should verify that the issuer is reporting by checking one (or all) of your three credit reports at the free annualcreditreport.com site. – dg99 Dec 17 '13 at 16:58
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Credit score is made of several factors with payment history, credit mix (different types of credit), and credit utilization being three important pieces of the pie. You have a student loan, which helps with the credit mix, credit age, and as you pay on-time with the payment history.

There are four types of credit you need for credit mix. Mortgage (not yet), Installment (auto loan), Revolving (credit cards), and Student loans. You will want to get between 2-4 credit cards once you have enough credit score to obtain good ones. I would recommend delaying credit cards until you have improved your credit file (credit age and history). An installment loan would be a good start.

Secured cards are often recommended, but often have high costs. As another respondent suggested them, I will defer to them.

Banks have been having really good experience with payment history and low default rates on auto loans over the past couple of years (much better than credit cards), so you might consider an auto loan as one approach to building credit. A good used car with a sizeable down payment would add an installment loan to your credit file. Some would recommend a new car, but I won't recommend that for the depreciation, etc.

  • A car loan? With zero credit? Interesting. I haven't ever heard of a car loan being mentioned as a way to establish a credit history. – MrChrister Dec 19 '13 at 18:20
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    Since the OP mentioned 'Student Journey' card, I assumed the poster was a student, and thus may have student loans, and thus not an empty credit file. My first loan was a personal loan from a bank to buy a used car. – ChuckCottrill Dec 19 '13 at 19:53
  • Fair enough - I read "building a score", but your idea is certainly interesting. Welcome to the site and thanks for participating! I hope to see more answers from you. – MrChrister Dec 19 '13 at 19:54

protected by mhoran_psprep Aug 28 '14 at 0:35

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