Build Credit Without A Credit Card

Your payment history is the most important factor in calculating your credit score.

Now what if you have no credit history? People will tell you that credit cards are necessary to build your credit. That’s wrong. You can build it in other ways. Experian Boost is a free service to instantly improve a score. Using bank records, it gives credit for on-time payments of utilities, telecom and certain streaming services. Only positive history is used and in minutes, Experian boosts your score. Once that happens, you can disconnect your account. You can open a secured credit card. You make a deposit, then borrow against the amount with regular payments.

A personal loan is another option although you may face high interest charges. Check with credit unions and make sure you can cover payments. A credit-builder loan is another option. Wallet Hub describes it as the opposite of a traditional loan. The “borrower” pays the lender in monthly installments, then receives the money back in a savings account at the end. During the process, monthly payments are reported to the credit bureaus. It’ll cost a fee and some interest. Check with local community banks, credit unions or online lenders. You want the lowest interest rate possible, a refund on some of the interest charged, and reports to go to Equifax, Experian and TransUnion. For a fee, renters can have their payments reported to the major credit bureaus via companies like RentTrack or PayYourRent. A good credit score is important in today’s world. It can save you money in both the short and long term. For stewards, that’s an important goal. 

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