How To Build Credit Without A Credit Card (2022 Guide)

This article will discuss how to build credit without a credit card. Building credit involves the creation of a credit history that shows your ability to repay certain debts and the responsibility you display in paying the particular obligation.

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Key Takeaway In This Article

• You’ll learn the fastest ways to build your credit without a credit card
•10 ways to build credit without a credit card
• Answers to some frequently asked questions on how to build credit without a credit card.

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How To Build Credit Without A Credit Card
Credit:cnbc.com

How To Get Credit If You Don’t Have Credit

Getting credit facilities could be very difficult if you don’t have a credit history or haven’t obtained any form of credit. An individual in this situation would need to follow some steps before being able to obtain credit. Below are some steps to get credit if you don’t have a credit history.

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• Become An Authorized User

One of the best ways of getting credit without a credit history is to become an authorized user. You can suitably utilize a family member or friend’s credit card. Also, becoming an authorized user with someone allows you to establish your credit history on the back of the primary account holder’s credit.

• Get Credit For Payment Of Monthly Utility

Another way to build and get credit without a credit history is by considering credit for monthly utility payments. Numerous establishments offer credit and would consider an individual who pays their monthly utility on time.

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• Obtain A Secured Credit Card

A secured credit card is a fantastic way to get credit without a credit history. It is straightforward for an individual to qualify for this card without needing a credit history. One would need to make a secured deposit on their account to receive a line of credit.

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10 Ways To Build Credit Without A Credit Card

Building credit without a credit card is challenging and impossible for an individual. But despite this notion, individuals can still suitably build their credit without a credit card. Below are the 10 ways to build credit without a credit card.

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1. Apply For A Personal Installment Loan

One of the ways through which an individual can build credit without a credit card is by obtaining a personal loan. A personal installment loan is one of the adjustable types of the loan facility that one can obtain for various needs. This loan ranges from $500 to $35,000, depending on an individual’s credit risk.

2. Finance An Automobile

An ideal way to build credit would be to finance your car through an auto loan. Through an auto loan, individuals would not only get finance for their car but also comfortably build their credit. However, one must compare various offers given the fees attached to getting loans without a credit history.

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3. Become An Authorized User

Becoming an authorized user is an excellent way of building credit. You can consider using a friend or family member’s account. It’s a more comfortable way of building credit since you would get a card and enjoy numerous benefits.

4. Obtain A Mortgage

Just like other types of loans, mortgage loans are another loan facility one can use to build credit. Despite the need to make a down payment, this loan offers an excellent opportunity to build credit. Mortgage loans are offered by credit unions, community banks, and various lending platforms.

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5. Apply For A CD Loan

Another way an individual can build credit without a credit card is through a Certificate of Deposits (CDs) loan. Individuals can borrow against the funds in their CD for a limited rate compared to other finance.

6. Finance Your Education

For an individual to build their credit, they can consider obtaining and settling a student loan. These loans do not frequently come up as some are due after 6 months of an individual’s graduation. But it does not stop you from paying earlier to build your good credit history further.

7. Request For Bill/Rent Report

Most credit assessments usually require housing and utility payment reports before credits are issued. As a result of this inclusion, one can suitably request for bill/rent report to use in obtaining credit facilities.

8. Apply For A Secured Credit Card

Applying for a secured credit card is a good step in establishing your credit. This particular card comes with many benefits compared to traditional unsecured credit cards. However, a user must have an initial deposit to access credit.

9. Utilize A Charge Card

Using a charge card is another option to build your credit without needing a credit card. An individual has a lot of access to diverse lines of credit with a charge card. But it’s advisable that you only charge what you can pay off.

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10. Use A Credit-Builder Loan

Individuals can use a credit-builder loan to build their credit without needing a card. This type of loan is designed mainly to assist various individuals in building their credit. They are offered by credit unions, community banks, and various lending companies.

Conclusion

Building credit without a credit card is straightforward if an individual considers the above steps. We hope this article provides enough information on how to build credit without a credit card. Kindly visit our comment section for your views and opinions.

FAQs

Below are the frequently asked questions and answers on how to build credit without a credit card.

What Are The 5 C’s Of Credit?

The 5 C’s of credit include Capital, Character, Capacity, Collateral, and Conditions.

What Credit Score Do You Start With?

Your credit score starts at 300.

How Do I Master Credit?

To master credit, you must pay your bills on time and take advantage of various rewards.

What Do Banks Look At Before Giving A Loan?

Banks consider your credit score, income, occupation, age, and repayment history before giving a loan.

What Is A Good Credit Score?

A good credit score ranges from 670 – 730.

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