Struggling with no credit score? 6 creative ways to unlock a credit card

Credit cards are no longer just a luxury but have indeed become a part of our lifestyle because of the perks it brings in. With credit cards you can unlock cashbacks, reward points and exclusive offers on your favourite brands. Hence, every time you use a credit card you can turn your transactions into smart payments.

It is not easy to get a credit card without a credit score as most lenders will check your credit worthiness before giving you a credit card. Fortunately, there are some options for those without credit history.

1. Opting for secured credit cards

• With secured credit cards, banks have a reduced risk from cardholders through a fixed deposit.
• These cards are perfect for building credit history since these payments are reported to credit bureaus. Timely payments can help you in building a strong credit profile eventually.
• Financial flexibility is provided by the credit limit, which is usually a percentage of your fixed deposit amount.
• A secured credit card can be converted to an unsecured credit card when managed well, and used efficiently.

2. Credit cards against savings accounts

• Some banks offer credit cards to customers with a long-standing savings or salary account.
• The card limit is generally determined by your account balance and your relationship with the bank.
• Banks give better terms to customers who tend to have high average balances or do regular transactions.
• This feature will allow you to secure credit without additional collateral requirements.

3. Add on credit cards

• These are available to the family members of existing credit cardholders.
• The primary cardholder’s credit limit is shared with these cards, which helps in responsible usage.
• It is a safe option for you if you are a beginner with no credit score as the primary cardholder is liable for the payments.

4. Prepaid and virtual credit cards

• These do not require a credit history but also do not contribute to credit score improvement.
• Useful for digital transactions and controlled spending.
• They offer enhanced security features, such as single-use or time-limited numbers to prevent fraud.
• Businesses and frequent online shoppers often use them for secure payments.

5. Special beginner credit cards

• Some banks offer entry-level credit cards for students and first-time users.
• These cards work as a good start by providing smaller credit limits to build credit history.
• Many beginner credit cards require minimum eligibility criteria which make them simple to apply for.
• A good credit handling will help you build a strong creditworthiness which will help you get larger credit limits in the future.

6. Buy Now, Pay Later (BNPL)

• BNPL services provide temporary credit facilities that work without checking your credit rating.
• Using these cards responsibly will make you more qualified for regular credit cards.
• Helps manage cash flow by breaking large purchases into manageable installments.
  Some BNPL companies send transaction records to credit bureaus that can help you build your credit history.

Tips to build a strong credit history

Timely repayments: Make your payments for credit cards loans and BNPL plans on time to create a good credit history which can also increase your credit score eventually.

Credit utilisation ratio: Make sure that you do not over exhaust your credit limit. Try to maintain a low credit utilisation ratio which does not increase more than 30% of your total credit limit.

Avoid frequent hard inquiries: Frequent requests for credit cards and loans can hurt your credit score and may reflect that you are facing financial constraints.

Check credit reports regularly: Make sure to monitor your credit report on a regular basis to identify errors and in case of any discrepancies, you must rectify them immediately as it may impact your credit score.

Credit mix: Your credit score improves gradually when you have maintained a mix of both secured and unsecured credit accounts.

In conclusion, even if you do not have a credit score, you can still get a credit card under certain circumstances. However, you must note that you must first evaluate your financial situation and only then apply for a credit card. This way you can avoid any unnecessary financial burden and also get the most out of your credit card.

(Note: Using a credit card carries its own set of risks)