Ways to Build Credit History Without a Credit Card
Building credit is one of the most important things that lenders can do for themselves in today’s economy. At some point, most people will have to depend on credit to make big purchases such as vehicles and homes. Consumers have to use credit to build credit history. Many consumers are against the use of credit cards (mostly because of high credit card rates), and they desire the use of other methods of using credit. There are many ways to build credit without the use of a credit card.
Building Credit Without a Credit Card
- Apply for a personal loan. Personal loans are fairly easy to receive. Consumer may have a better chance of receiving a loan from their personal bank. It may also be easier to receive a smaller loan than a larger loan. Consumers can pay off the loan and apply for another one to build their credit.
- Buy a vehicle. This is one of the most common ways to build credit. Lenders will usually allow first time buyers to purchase a vehicle. It may be necessary to get a co-signer, and a co-signer can increase consumers’ chances of getting the vehicle loan from a lender.
- Purchase a home. Many people dream of owning a home so they make the first credit purchase a home. A home is a great investment that usually increases in value over time. Purchasing a home is a safe investment that helps credit scores more than many other forms of debt.
- Rent a property. Renting a home or apartment can help consumers build their credit. Landlords report payment history to credit agencies. As long as consumers pay on time their credit scores increase. Consumers should make sure that the property owner reports their payment history to the credit bureaus.
- Build credit on recurring payments. More and more people are making requests that their payment history on utility bills be reported to credit agencies. Utility companies usually do not report payment history to credit agencies unless consumers default on their payment agreement.
- Apply for a student loan. Those who plan to attend school can benefit from getting student loans. Student loans are considered a good form of debt. Lenders can just borrow a few hundred or a few thousand dollars in student loans to help them build credit without a credit card.
- Apply for a bank loan to purchase a CD. Personal banks are more likely to let their customers borrow money. Some consumers borrow money to purchase a short-term CD, and they pay off the balance of the loan once they close the CD.
Consumers can build credit without every applying for a credit card. There are a number of options for first time credit users to establish credit for the future. Lenders may offer special options for first time credit lenders. Credit cards are not always an option for some consumers. Consumers should carefully consider each option to build credit easily before making a commitment because the decision could have a positive or negative effect on their credit. Building credit without a credit card has never been easier.