Why do i get declined at 18 with a credit card application?

Question

I had just turned 18 a few months, ago but when i chose to sign up for a credit card tonight at 2 locations..
www.newegg.com and
www.officemax.com
i was declined with this message "LIMITED SATISFACTORY CREDIT HISTORY"

I'm trying to understand what exactly that means, i have 2 bank accounts all good, no problems, and no credit cards.. How can i establish good credit if i cannot even get a credit card?

Or do you know of any sites or stores that have a near 100% approval

Answer 1

Follow Echo's advice, it's excellent. But I disagree with one thing.

If your parents have good credit, consider having them co-sign a credit card for you. That will look better then being an authorized user on their card.

Other ideas...join a credit union. They are usually a little more willing to give credit, since they are a member owned bank and not out to make the big bucks that banks do.

Apply for some loans. Secured loans look great on your credit.

I was once in your position. I had a very good job. I paid cash for my car, and every time I used my credit card I paid it off at the end of the month. Many times I over paid so I had a negative balance.

When I was 23 (this was back in 1978) I had saved $40k. I planned to put $20k as a down payment to a house, and spend the rest to buy furniture/appliances. Anything else I would buy on credit.

I got turned down for a mortgage! The reason? No credit history. They did not consider my single credit card history sufficient.

Go figure! I finally managed to convince them I was a good credit risk. But I learned my lesson.

Now I tell people to get their kids a credit card at 16 (have the parents co-sign). Keep the limit to $200 so they don't screw up.

That way, by the time you are 20 you have established a 5 year credit history and will have no problem getting more credit.

Answer 2

Build a history.

A secured card is a great way to start. Shop around for them at www.bankrate.com.
Also start off with gas cards and department store cards.
Also, see if you can take out a loan.

You need a history first. Try and get 4 lines of credit going.

Before you can get a card or a loan with a good rate, a lender wants to see that for the past 12 to 6 months at least 4 financial institutions say that you pay your bills on time.

In the mean time while you are starting out:

Always be on time with your payments
Never max out a card - in fact you should not borrow more than one third of the amount lended to you
Use your credit. It looks bad if you have a card that is never used.

Later on when you can get good cards you will be able to cancel the high interest ones.

Answer 3

There are 2 primary factors that determine your credit worthiness.

Your debt to income ratio and your payment history... you also have to be aware of your length of credit (how long you have had open unsecured accounts, etc).

Here is how you can get a credit card to begin with... first you need to get a secured card - you put money into a fund with the bank.. and you are issued a credit card for the same amount of money... if you fail to pay they simply take the money from the fund... This will help you to establish a payment history... after 6 months of using the card and making timely payments you can roll this over into an unsecured credit card.. continue on the same process... dont apply to too many cards at a time (more inquiries for new credit scares lenders... they think that you are desparate and will not repay your other obligations)... It takes time and responsible activities to build up your creditworthiness.. You can also have your folks sign on as co-applicants, or guarantors of the card... but make sure that you dont fall behind - it affects them too if you do... I always recommend that parents list their children on as co-applicants for a credit card - that way when the child reaches 18 they already have a lengthy credit history (and unless your folks are bad with paying bills). look like a good risk for banks. hope that helps...

Answer 4

Like some of the posters mentioned, credit card history is different than bank account history.

You may have to start out with a secured card.

Or, if your parents have cards that have great history and low utilization, you might ask them to add you as an authorized user. If they will, be sure and have them request that it reports on your credit report. They will have to give your SSN for that.

If they add you, wait until it starts reporting then apply for a card.

If you cannot be added as an AU, you might try the following sites:
Bank of America, Orchard Bank and HSBC. They have a card selector on their site that will not pull a hard inquiry. If you apply for a recommended card, then they will pull a hard inquiry. Keep in mind that even if a card is recommended, there is no guarantee that you will be approved.

I would start with BofA first since it is in the prime range.

Stay away from Cap One. They will only damage your credit by not reporting your credit limit. They only report your high balance which makes it look like you have over utilized your card.

You might try Walmart. Also Chevron/Texaco has a builder/rebuilder card.

There really isn't 100% approval on major credit cards. Unless you go very sub prime. But then you would be paying out more than the card is worth in non refundable fees and deposits.

The only one that I know of that is a guarantee, and worth getting for the tradeline, is Crown Jewelers. They do not pull a credit report. The only catch is that you have to make a purchase for them to report to the credit bureaus. But, for $20 or $30 you may have a $1500 credit limit reporting.

Answer 5

As previously stated, being 18, you have very little or no credit history. Lines of credit, especially from retailers are hard to get.

I would shy away from store or retail credit cards. They tend to have outrageous interest rates and very low limits. Plus you can only spend at that store, so your scope of functionality is extremely narrow.

Now, you want to get a credit card to build some history. There are a few options:

1) Gas card.

They are very easy to obtain but carry high interest rates. Yes, this is a retail credit card like I told you not to get, but this will build history as you will use it all the time to get gas.

Go to your local major gas station you frequent, get a credit application or go online to their website. They usually have apps online.

Then pay the thing off for 6 months to a year before trying to venture into other credit cards.

2) Credit card from your bank

If your bank accounts are at a larger type institution (US Bank, Citibank, Bank of America) they may be able to help you start with a credit card. Since you have bank account history with them that will help.

3) Good start up credit card companies

Capital One comes to mind. They gave my sister credit right off the bat. But I have never liked their card products. However, it would be a good option for you since you are starting out.

4) Secured credit card

Many people with little credit history go this route. Basically you place a cash deposit equal to your desired credit limit. You are then issued a card. As long as you pay your credit card bill, they won't touch that deposit. After a year or so they may offer you a normal unsecured card and give your deposit back. If you default though, they will take your deposit up to the defaulted amount.

Essentially that deposit is what we call collateral in loan talk. Most credit cards are called unsecured loans. They are loans which have nothing but your credit history and good word that you will repay.

However, the collateral tells the bank that they have something in case you decide you can't/won't pay on that credit card.


Anyways, whatever route you choose, good luck!

Answer 6

A bank account usually has little impact on getting a credit card for the first time. Your best bet is to apply for a student account through someone like Visa. They will set a low limit (like $500) and you need to have someone co-sign on it with you. They also request information about income for both you and your co-signer. You need to have a major credit card almost always before being approved for smaller ones. Try to limit the number of cards you have. Every time you apply for a new card, it can lower your credit score.

Answer 7

i found a site with 100% approval credit cards... I didn't actually apply for the 100% approval. I applied for the Orchard Bank Platinum Mastercard, it was on the list as a poor credit credit card with a high overall rating and a benefit rating. View the source

Answer 8

It's just like getting a decent job...they want you to have experience to get more, and it sucks. Try taking out a loan from your bank, since you have good standing there. Pay back the loan, even if it is just taking it out and putting it back in, and then wait a few months, and apply for a credit card. You should have more luck.
Having no credit is like having negative credit.
Another thing you can do is purchase a few items (like a computer or a tv) from Best Buy or something and pay it off monthly. Get a cell phone in your name. Those things count. Even if your parents are paying, ask them to transfer it to your name.

Answer 9

It means essentially that you have no credit history. Go to your bank and see if they will issue you a credit card. You may also be able to co-sign with a parent.

Be warned that you may be given a very high interest rate because of you lack of history.

Answer 10

LIMITED SATISFACTORY CREDIT HISTORY means you are too young to get a credit card and regularly pay your bills. Once you land a steady job and have proven that you can discharge/ handle monetary responsiblity over time, then they will be falling over themselves to throw creadit cards at you.