Applying for credit for the first time

When you apply for your first credit card or loan, lenders try to determine how likely you are to pay back what you borrow. They look at a lot of different factors, but start by following these guidelines:

  • Have an income — It’s hard to pay back money if you don’t have any. A bank may ask to see pay stubs or proof that you can repay.
  • Show you can make consistent payments — For credit cards, there’s a minimum due every month based on how much you’ve borrowed. Lenders want to make sure that you can pay every time.
  • It helps if you’re a customer — If you already have a checking or savings account with a bank, they know something about you and may be more likely to give you that loan or credit card.
  • Don’t ask for too much — Start small and manage your credit well, and later on you’ll be able to borrow more.

There are many types of credit

All of them can help you build a strong credit history. Some are common. Others are more rare. Select one of the icons to learn more.

There are many types of credit

All of them can help you build a strong credit history. Some are common. Others are more rare. Select one of the icons to learn more.


The credit universe

There are many types of credit

All of them can help you build a strong credit history. Some are common. Others are more rare. Select one of the icons to learn more.

Student loans

Loans used to finance education. You borrow the money, generally each school period, and pay it back in fixed payments after you finish school.

Services aren’t credit, but they still count

You make payments on monthly bills like utilities, cell phones, and gym memberships. Although these aren’t types of credit, sometimes your payment history on these can impact your overall credit history, especially if you miss payments.

Car loans

If you own a car, you make a fixed payment every month over a preset period of time.

Credit Card

A credit card lets you borrow money from a lender to make purchases and then pay it back later. The amount you pay back each month depends on how much you borrow.

Secured cards

A secured card is a special type of credit that’s similar to a credit card, but requires a security deposit as collateral for your account. That means you deposit an amount of money up front and the bank holds it for you. Then when you use your secured card, it helps build your credit history.

Rent

Even though it’s not a form of credit, your rent can be reported on your credit history. That means if the rent is in your name and you are making your monthly payments on time, you could be building your credit history right now.

Applying for your first credit card

 
Step 1: Establish a relationship with a bank. It’s easier to get your first card if you already have a checking or savings account. Step 2: The lender may require proof of income to make sure you can pay back the money you borrrow. Step 3: Apply for a credit card. Many financial institutions offer credit cards for customers who are new to credit or who are rebuilding credit. Step 1: Establish a relationship with a bank. It’s easier to get your first card if you already have a checking or savings account. Step 2: The lender may require proof of income to make sure you can pay back the money you borrrow. Step 3: Apply for a credit card. Many financial institutions offer credit cards for customers who are new to credit or who are rebuilding credit.

Getting your first credit card

banking establishment icon

Step 1: Establish a relationship with a bank
It’s easier to get your first card if you already have a checking or savings account.

dollar sign inside of a circle

Step 2: Have an income
This could be income from a job, a regular allowance, or another source.

credit card icon

Step 3: Apply for a credit card
Many financial institutions, offer credit cards for customers who are new to credit or who are rebuilding credit.

Secured Credit Card or College Credit Card?

Secured Credit Card

If you are having trouble qualifying for a credit card, a secured credit card could help. A secured credit card requires a security deposit, which is held as collateral for your account and cannot be used to make payments.

It’s a smart way to begin to establish a good credit pattern, because unlike a debit card or a prepaid card, secured credit card payment information is reported to major credit bureaus. Then, as you build a positive history, you may qualify for other forms of credit in the future.

College Credit Card

Starting out with a College Credit Card can help you establish credit while you’re in college. When you’re ready to rent an apartment, set up utilities, apply for a car loan or a mortgage for yourself, having established credit helps.

 

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Follow these guidelines and use your credit responsibly, and you’ll be on the path to good credit.

For more about building and managing your credit, visit our Smarter CreditTM Center.


 

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