A credit is an extended debt owed by one person or organization (the debtor) to another person or organization (the lender). The lender provides consideration, usually money, for the promise that the debtor will repay it according to the terms set out in a contract. Building credit is an essential building block for future financial goals, such as buying a car or house. So, how do you build credit without a credit card? Let’s talk about it!
7 Ways On How To Build Credit Without a Credit Card
1. Paying Your Bills On Time
By making your payments on time, you will build trust and credibility in the eyes of lenders. When you make your payments on time, it is a sure sign to them that you are responsible with money and will be able to pay your bills on a timely basis.
2. Use Savings for Timely Bills Payment
You can also utilize your savings to make payments for the bills. You can build your credit without a card by making timely payments from your pocket to lenders. The best part is that you will have saved some money that can be used when you need a credit card.
3. Use a Co-Signer
When you need a credit card, you can achieve it using co-signers’ help. It is vital to choose your co-signer prudently, as your financial future will be in their hands. When choosing someone as your co-signer, ensure they are trustworthy and have healthy finances.
4. Use a Viatical Settlement
A viatical settlement is an annuity that allows people to make a lump-sum payment to eliminate expensive medical bills and debt. You can buy credit without any credit score by paying a lump sum of money. It is an easy way for you to build credit without using a credit card.
5. Use a Secured Credit Card
Choose a secured credit card with low APR and low limits when looking for a secured credit card. By doing so, you can build credit without using a credit card. Though secured credit cards are not always suitable for everyone, it is still one of the most efficient ways to make credit without a credit card.
6. Use Payroll Debit Cards
A payroll debit card works like any other debit card and is usually used in place of paper checks. The best part about these cards is that they help employees build credit without any credit cards. Through these cards, you will be able to make credit responsibly.
7. Use a Balance Transfer Credit Card
A balance transfer credit card is one of the easiest ways to build credit without a credit card. Unlike other kinds of credit cards, these cards are not connected with your name and will not run background checks as they don’t have any accounts in your name. To have a credit history, you need to use these cards responsibly; otherwise, it can be detrimental to your financial future.
The most important thing regarding how to build credit and when to do it is to be responsible. Make sure you handle your finances responsibly and follow your income. Always choose credit cards wisely, as not every card can help you build credit correctly.
