The world has fallen in love with plastic money and credit cards have become a norm, however, there are still a few who want to live without the hassles of a variable APR and monthly payments of a credit card!
The Credit Score Dilemma!
A good credit score puts you in the good books of financial institutions. Credit cards have always been looked at as the sole reason for influencing the credit score.
The actual factors that impact a credit score aren’t credit cards but what credit cards do! Merely having a credit card and not using it will not give you a better credit score.
The actual influencers & the value add they bring to the table
- Types of credits used – 10%
- New credit enjoyed –10%
- Length of credit history –15%
- Amounts owed – 30%
- Repayment history – 35%
Based on these above given factors it is possible to build credit without a credit card by concentrating on just these aspects.
Know where you stand
In order to increase your credit score, you should first know what your current credit score is. It is advised that you check your credit score before starting the credit building exercise. There are special reporting agencies and sources that will help get you a copy of your credit report. Apart from recognized agencies, there are few free online sources that can come to your aid as well.
How to Improve Credit Without a Credit Card
There are other ways and means by which you can increase your credit score. Here we will look at the options.
Apply for a Bank or Credit Union Loan
As mentioned above, credits and repayments help boost credit scores. The best choice is to apply for a loan in the bank where you have your checking account. If your checking account has been in existence for more than 2 years you can even request credit builder loans. Credit Unions too function on similar lines.
Repayment of Student Loans
If you had procured a student loan for your studies, the best way to start improvising your credit score is to start repaying those loans. Making on time payments will help you significantly while on the other hand missing a student loan can leave a dent on the credit score.
Become an Authorized User of a Friend’s or Family Member’s Account
If a friend or a family member has been maintaining a high credit score, you can request them to make you an authorized user. This will help you get a credit card based on the other account. When the primary cardholder uses their card, manages the account responsibly and reports about the authorized user to the credit bureaus, it will help improve your credit score.
Have a Word with Your Utility Providers
Most utility providers like internet, cable TV, gas, electricity, etc. often highlight only defaulters and do not mention those who are prompt with their utility payments. Their word to the credit bureau will put you in their good books.
To the many who keep pondering as to whether is it possible to build credit without credit card, the answer is there for all to see. It is very much possible provided you are dedicated in increasing your credit scores.