Oddly enough, not only will bad credit work against you when applying for a loan or a credit card, but so will NO credit. Even though this doesn't seem fair, its the way things work in the complicated world of consumer credit. Lenders are leery about opening accounts for people with no credit history, simply because they have nothing by which to judge your reliability.

If you can't build a credit history without credit, and you can't get credit without a credit history, what can you do? It's nearly impossible to rent a car, stay in a hotel, or shop online without a credit card.

Let's explore a few ways to work around this "Catch-22."

Getting Started in Credit

Although many of the major credit card companies won't give you a card without a credit history, some smaller ones will. Department stores are likely candidates. Gas station cards are also easier to get.

Also you can look for a credit card company that will review your overall financial situation, not just your credit history. Some lenders will look at your employment history, your housing situation, and how often you have moved. If all this meets their standards, they may approve your application.

Credit Unions

If you are a credit union member, or are eligible for membership, see what their card issuing terms are. They often have more relaxed conditions for members. You no longer have to work for a specific company to be eligible to join a credit union. So, it's well worth checking to find out if there's one in your area.

Student Credit Cards

If you are a student, then you'll be best off with a student credit card. Student credit cards can be a great way of building the credit history you will need after graduation. Many banks will issue college students a credit card, especially banks that are located in college or university cities and towns.

Secured Credit Cards

As a last resort, because of their high interest rates, secured credit cards are available. They are offered by lenders who will give you a line of credit either equal to, or slightly higher than, a cash deposit that you give them to hold. As your experience with the card grows, these lenders will often raise your limit without requiring you to increase your deposit. Eventually, you can use your experience with this lender to apply for cards that are not secured.

When you do manage to get a credit card, don't go on a spending spree -- you will regret it in the very near future. Use your card wisely, and above all be sure to make all payments on time. Your goal is to build a good credit history, not just get a single credit card. Soon you'll be complaining about all the credit cards being offered to you in the mail.