You don’t need a credit card to build credit

Checking Credit Card

We know, this may sound a bit weird at first, but what if we told you that it’s absolutely possible to build credit even if you don’t own a credit card?

Exactly, there are a few untapped ways of developing your credit even without relying on a card. And we’re going to discuss them in the following lines!

Let’s begin, shall we?

Apply for a federal student loan

If you’re still eligible for such loans, you should know that most part of the federally backed student loans don’t require having a credit history, therefore they can be great ways of beginning to build credit.

Simply put, all payments made against these lines of credit are being reported to three of the main credit bureaus – Equifax, TransUnion, and Experian, to be more specific – and eventually, become part of your credit report. As long as you make your payments on time, this will improve your credit score.

Become an authorized credit card user

One of the easiest options of building credit is becoming an authorized user on a borrower’s credit card. Basically, this allows you to piggy-back on the borrower’s credit history. And the best part about this is that you don’t even need to touch the credit card in order to benefits from that person’s low payment balance or on-time payments.

On the other hand, only somebody who trusts you a lot will agree to this method, so if you’re planning to build credit this way, asking a family member to authorize you is pretty much the best option.

Opt for a personal loan

Finally, we should also talk about personal loans, which are also great for those who want to build credit without a credit card.

We’re talking about installment loans, meaning that you need to pay fixed amounts monthly, as well as interest rates, in a span of 12 to 60 months. Also, you will need a co-signer if you want to quality for lower rates, so make sure you’re well prepared before applying.

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