How To Build Credit Without A Credit Card

Building credit with no credit card is possible, and this article by Auto Cash USA is going to tell you how. First, you’ll discover what’s in your credit history and score.

Then, you’ll dive deep into 5 ways to build credit without a credit card. As you reach the end, you’ll find out how to borrow money for emergencies while building credit.

What’s In A Credit History Or Score?

Whenever you’re exploring any topic related to your credit history or score, you must understand what goes into them.

In a nutshell, your credit history is a record that shows lenders how creditworthy you are, i.e. what the risk is if they give you credit.

Meanwhile, your credit score is a number that indicates your level of creditworthiness to lenders. Lenders use that number to decide how risky it would be to lend you money through products like loans.

Your credit score is determined based on your payment history, how much of your credit you utilize, and how long you’ve had a credit history. It’s also based on your credit mix, i.e. how many different types of credit you have, how often you request new credit, and your other public financial records.

Understanding how your credit works will help you build and improve it in the long run.

5 Ways To Build Credit Without A Credit Card

Building credit can be quite challenging in the beginning. Still, it’s one of the most important things you’ll do for your financial health.

Use one or more of these methods to build credit without using a credit card:

1. Be An Authorized User

Getting a credit card on your own is difficult, especially when you don’t have a strong credit history. Still, you can use someone else’s by getting them to include you as an authorized user of one of their cards.

For example, you can become an authorized user on a friend or family member’s existing credit card.

Doing so will appear on your credit history and help you build your credit.

2. Consider Retail Store Cards

Another option you can consider is to get a card from a retail store. Many large retailers have in-store cards that enable you to make purchases without using cash.

Depending on the store, the card, and its terms, your use of the card might be restricted to certain retailers.

Despite that, these cards could help build your credit history by showing that you can manage them well and are, therefore, creditworthy.

3. Use Credit Builder Loans

Banks and other financial institutions have products designed to help build your credit. A popular example is a credit-builder loan.

Typically, a credit builder loan will have more lenient requirements, making it easier for someone with little or no credit to get approved.

Just be sure to service the loan correctly by making payments in full and on time. That will help you build your credit history and show you can handle the responsibility.

4. Utility And Rent Payments

Believe it or not, your utility and rent payments can also help build your credit. 

Some utility companies report your payments to the major credit agencies. That’s why you must ensure your payments are never late, or those will reflect on your credit history as well.

Besides that, you can also rely on rent reporting services. These companies enable you to report your rent payments to credit agencies and show you’re responsible when managing payments.

5. Approach Credit Unions

Last but certainly not least, consider approaching your local credit unions. These financial institutions may have programs to help you build credit.

In addition, they might also offer credit-building financial products like loans with less stringent requirements for people like you.

Alternate Ways To Borrow Money While Building Credit

Building good credit takes time and financial emergencies can happen along the way. When they do, you’ll want a way to borrow money quickly that’s helpful even if you have bad credit but that won’t negatively affect your credit.

One option you can consider is a title loan. This finance option allows you to borrow as much as $15,000 by using your car title as collateral.

Besides the title, you only need your driver’s license or state-issued ID. You’ll also need to have your car inspected by a representative, though you can drive it home and keep it once its value is determined.

You can get a title loan even if your credit is bad. Plus, title loan lenders usually don’t report to credit agencies because this product is considered a form of alternative funding.

Get Emergency Cash, Even With Bad Credit!

Building your credit history is possible even with no credit card. As you read earlier, there are plenty of other ways to show credit agencies that you’re creditworthy and can manage money well.

Auto Cash USA provides services that are also an option while building credit. Just submit your basic information through the secure inquiry form online and get connected with the title loan lender in our network that is best suited for your financial situation and location.

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.