How to Get Unsecured Credit Card

Unsecured credit cards do not require a cash deposit.

Whether you are trying to build credit for the first time or simply want more purchasing freedom, an unsecured credit card helps you meet your financial needs while also creating a purchasing record that demonstrates your responsible spending habits to other lenders. Unlike secured credit cards, unsecured cards do not require you to provide collateral to the credit card company. Because the risk of financial loss is higher for unsecured creditors, you must display a satisfactory credit rating before the company will approve you for one of its cards.

Instructions

1. Contact the credit card company you're interested in applying for a card with. Ask the customer service representative what the minimum credit requirement is for the card. This helps you determine ahead of time whether or not you will qualify for the account.

2. Buy your FICO scores. Credit card companies pull your FICO scores when you submit an application for a new credit card. The Fair Isaac Corporation sells FICO scores to consumers at myFICO.com. Compare your FICO scores to the credit card company's minimum credit requirement to determine whether or not you qualify for the card.

3. Boost your credit score, if necessary, by paying down balances on your existing credit cards, disputing errors on your credit report and paying each of your current creditors on time.

4. Ask a friend or family member to cosign with you if your credit repair efforts fall short of meeting the credit card company's requirements for approval. Your cosigner must have a credit score that meets or exceeds the credit card company's guidelines.

5. Apply for the card. Most credit card companies offer applications on their websites. Depending on the credit card company, you may receive an approval or denial notice within minutes.

Tips & Warnings

• Research the different credit cards available to you before choosing a credit card to ensure that the card you ultimately select fits your needs.

• If the credit card company turns you down, that does not mean that you cannot qualify for an unsecured credit card. It merely means that you do not qualify for that particular account.

• Each time you apply for a credit card, the credit card company conducts a "hard pull" on your credit report. This hard pull lowers your credit rating approximately five points. Numerous hard pulls within a short time period can lower your credit scores considerably. Thus, its imperative to investigate your own credit scores and the credit card provider's requirements before you fill out an application.

• If you used a cosigner to help you qualify for your new unsecured credit card, the cosigner is liable for your debt in the event you stop making payments.

References

• CBS News; Understanding Your Credit Score; Tatiana Morales; February 2009
• MSN Money; 9 Fast Fixes For Your Credit Scores; Liz Pulliam Weston; December 2010
• Experian; Cosigners Are Responsible for Debt Repayment; Maxine Sweet; April 2006
• LendingTree; Credit Inquiries -- "Hard" Pulls vs. "Soft" Pulls; 2011

Resources

• The Federal Reserve Board; Consumer's Guide to Credit Cards; November 2010
• Federal Trade Commission; Choosing a Credit Card -- The Deal is in the Disclosures; June 2008
• myFICO: Homepage