Question : How does someone build credit without a credit card?
I am thinking of those who do not have a credit card and pay for everything by check and cash. How is their credit rated? Is it based on a loan for example (car, student, etc.) and what if it is their first time applying for such a loan? How is their credit history looked at then? What if someone is applying for an apartment rental and does now own a credit card?I have always wondered this.Also, some people, after having paid off their debt, switch to using cash or check only, but apparently no activity at all on your credit card accounts isn't good either.Any input?
- asked by Li
All Answers:
Answer #1
More than 50% of people never carry a balance oncredit cards and pay in full each month.These arethe people that generally have awsome 800+scores.They have never paid a penny interest orany annual fees.And some cleverly get up to 5%cash back (free money), from their cards.Get acard. Just pay in full each month so you neverpay interest and get a top rating.Buy things youneed like gas or food only.Some people that get indebt are impulsive and buy things that they don'tneed on the card.
- answered by Madoff
Answer #2
For people who do not have a credit card and payfor everything cash they do not have a creditrating. In order to have a credit rating you haveto have credit cards or installment loans. Alsoyou have to use your credit, a long time ofinactivity one your credit report will lower yourscore. You need recent account history
- answered by Dixie Darlin'
Answer #3
buy a house
- answered by Desert Horse
Answer #4
First of all, you do not need a credit card tobuild credit. Any type of loan will build yourcredit.If you do not have any credit, it is muchharder to get approved for a loan and usually acredit card offers the easiest way to startbuilding your credit. Especially a secured creditcard since anyone can get approved for a securedcredit card.In regards to your question aboutapplying for an apartment rental without a creditcard, it does not matter whether you have a creditcard. What matters is whether you have good credithistory. If you do not have good credit history orhave no credit history then you will be asked tohave a co-signer and/or place a larger securitydeposit in order to get approved for the rental.Itis not true that not using your credit card you donot build up your credit history. However if youclose your credit cards then they stop reportingevery month that you are in good standing to thecredit reports which does not help you incontinuing to build up your credit.
- answered by Alexandra
Answer #5
Get in the habit of checking your credit reportregularly (at least annually). You are entitled toa free credit report from all three credit bureausonce per year, so take advantage of thisopportunity. Review your credit report for errorsand dispute any erroneous information. Such errorsmight be unnecessarily dragging down your score. Creditors view these kinds of accounts as a signof stability and responsibility, so make sure youhave one or both of them. Free checking is almostan industry standard, so you can find a good dealif you shop around at different banks. A currentchecking or savings account will also help yousecure a payroll loan. If you do not qualify for acredit card or loan on your own, you might dobetter with a co-signer with good credit. The bestpart of having a co-signer is that his/her goodcredit partially becomes yours. That means youhave a great opportunity to boost your score bypiggybacking on someone elsels credit for a while.When you cannot qualify for unsecured creditcards, think about starting off with a securedcard. Make sure you get a secured card thatreports your activity to the credit bureaus so youhave a chance to rebuild your credit. The bestsecured cards turn into unsecured cards with morefavorable terms after you demonstrate responsibleuse and payment behavior for a certain period. Asecured card can also be a great alternative to apayroll loan in emergency situations. Keep yourbalances low and pay them off every month. Youwant to keep your balance-to-limit ratio as low aspossible.
- answered by expert 2009
Answer #6
You might want to check all answers for thisquestionhere
http://1centralx.co.cc/how-does-someone-build-credit-without-a-credit-card-9
- answered by Bryan2
Answer #7
You can build your credit by getting a free debitcard. Some of these programs help you build apositive credit file by reporting the regular billpayments you make with your debit to participatingcredit reporting agencies
- answered by Miss Easley
Answer #8
That is a great question! You can build creditthrough secured installment loans (usually throughcredit unions). Try to steer clear from financecompanies. They are a higher risk and usuallycharge higher rates. The best way to build credit,however, is through secured credit cards orsecured installment loans. Revolving credit(credit cards) have a very high impact to whatyour credit score is, because it takes moreresponsibility to handle credit cards (i.e.fluctuating balances, payments, rates). If you areattempting to purchase a house in the future, youwill need to establish at least 3 accounts on yourcredit report and pay on them for at least 12months. The mortgage guidelines are very strictnow. Make sure that you pay your cards off eachmonth and DO NOT have any 30 day late payments.You can go to www.800express for more informationon secured credit cards. Also you can go towww.myfico.com to get additional information onbuilding credit.
- answered by Rodney
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