How do I establish credit without a credit card?

Question

Credit cards are becoming more and more picky about extending credit, and the interest rates are through the roof. What are some other ways I can establish solid credit without a credit card or major expenses? I go to college full time and work full time, I don't want to get into heavy debt.

Answer 1

Take a small loan and repay it on time.

Answer 2

Just because you get a credit card doesn't mean you'll get into "heavy debt". If you use it wisely and only charge what you can afford, you'll be fine. A credit card is probably the best way to start building your credit. But you could also get a small personal loan from your bank - which will also create debt.

There's actually quite a few credit cards designed specifically to help people establish or improve their credit. Although you'll pay higher interest rates and additional fees with one of these offers, they'll help you build your credit score over time. Eventually, with regular on-time payments, you'll be able to qualify for better offers with lower fees and less interest. But for now, these are the types of offers you'll qualify for: http://www.asapcreditcard.com/poor-credi...

Hope this helps. GOOD LUCK!

Answer 3

Kinda like another answer....but a really easy way is to take cash that you have on hand and open a "secured" credit card through your bank. Let it sit there. You'll gain points on your credit report for opening that line of credit. Also, to build your credit after that, make sure that if you use that card, that you don't use more than 50% of what you have on the card so your rating doesn't drop. You will then also be able to open an account with a store, but i wouldn't recommend getting trapped into using store cards since their interest rates are ridiculously high. Another option is Capital One, they have a credit card for people with no credit, you might want to look into that as well. Good luck!

Answer 4

First of all, how can you possibly start your credit history without having a credit product (e.g. credit card, mortgage, line of credit etc).

High-interest rates are here to stay, so is the fact that how picky banks are when lending you money, so those are pretty much constants, there is no hard and fast rule to bypass that systematic process.

You will need a credit card to start your credit, if you don't how can possibly even think of having 'solid credit' without having credit? you must show the banks you are capable of handling debt, and they need to see this on an ongoing basis to decide where to give you more credit and so on and so forth.

If you responsibly handle even one credit card (visa or mastercard) and do not charge it a lot, and pay it in a timely manner I don't see why you'd be in 'heavy debt'.

Control spending habits, do not be too extravagent and neither too conservative.

Establishing credit is not hard, but ruining it basically takes just one payment.

Since everything is now so much interlinked with the credit system. Establishing credit without a credit product does not work.

Hope this helps you. :)

Answer 5

YOUR BEST MOST SIMPLE ANSWER...get a cell phone with a 2 year agreement under your name for payments. :D that's how i'm starting to get my credit without a card!

Answer 6

I agree with those saying to get a credit card - find one, such as capital one, who offer low limit cards, starting at 250 dollars, to college students. You will pay some fees, but pay the card on time for 6 months (put simple recurring bills such as groceries on it and pay it off in full each month) and after the 6 months ask to be switched to a no, or low fee card. I would also apply for a small signature loan with a credit union, and a small deferred interest federally subsidized student loan if possible. This will build additional credit history and cost you nothing as the government pays the interest and payments until you are out of school. Drop it in your savings account and reap the rewards of some free conservative investment collateral. The reason you should try for these 3 items is that it shows diversity of credit in both amount and type, which highers your score - especially since in the long run your score is based off of the length of history of credit also, and you will have all three types established for a long time.

To clear up some myths - Things like cell phones (as another answerer suggested) and utilities do NOTHING to help your credit! The only time one of these types of accounts would be listed on one of the major credit bureaus would be if you failed to pay it. Positive payment histories are NOT reported.

Also, you very well can find a small signature loan, especially at a credit union.

Answer 7

take out a personal loan at a bank for like 500 and just pay it back over the amount of the loan. you will lose money but it will build your credit and it works for that. plus you can use automatic debt to pay the bill so it's not like your really doing anythign with it. you have to goto debt to get a credit score. a 500 dallor loan over 2 years will have a payment under 50 a month.

Answer 8

The best way to improve your credit is by having someone that is credit responsible add you as an authorized user on one or two of their card(s) that has a long history. The card(s) must have little balances with much available balances. That person don't have to worry about you using the card by not giving you a card. They're simply just making your credit look better with established history.

One poster on here "reij" said to get a loan for $500? You can't get that kind of loan at a bank.