Building Credit Without Credit Cards

A credit card is one of the main ways to build credit. By using a credit card wisely and not running up huge bills and paying them off in full on time, consumers can improve their credit score. A good credit score can make getting a home, car and other loans easier, and at better interest rates.Some people who have poor credit may have difficulty improving their credit score fast enough, and others may not even want a credit card.A credit card isnt the only way to build credit. Here are some other ways:Get a small loanApply for a small loan from your bank or credit union. If youve had an account in good standing for a few years, you should be able to get a small loan.Some banks may only offer secured loans, meaning youll have to come up with some collateral such as a car to qualify for the loan. However you get a bank loan, pay it back on time and your credit score should improve.Monitor student loan paymentsYou should be working hard to pay all of your loans on time. Repaying student loans on time will help build your credit as much as any other loan. On the opposite side, missing a student loan payment can hurt your credit score.Ask utility providers for helpElectricity, gas, cable TV, internet and other utility providers report delinquencies to the credit bureaus. Some, however, also report positive payment history, such as on-time payments, to the credit bureaus.Call your utility providers to see if they report positive payment history, which can improve your credit score. If they dont, ask if they can give you a letter of reference in support of a credit application.Report rent paymentsJust like utility companies, not all landlords report on-time payments to credit bureaus. Ask your landlord if positive rent history is reported. If not, ask if it can use a third-party website such as Rental Kharma to verify your rent payments each month.Another way is to sign up with a rent payment service that uses Experians RentBureau. Your rent is paid through the service and independent verification that youve paid your rent on time isnt needed.Become an authorized userA friend or family member who has excellent credit can add you to their credit card as an authorized user. It allows you to use their credit card and share their credit limit.As long as the main card holder pays the bill on time every month and keeps the balance low in relation to their credit limit, your credit score may benefit. Check first that the card issuer reports authorized users to the credit bureaus.You wont be responsible for paying the bill, so being an authorized user wont help your credit profile a lot, but it will help some if its reported.Feel free to contact me for other helpful information.Published with permission from RISMedia.