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If you want to build credit without using a credit card, there are a number of different ways that you can do so. Here are a few of the best ways to build credit without credit cards.
1. Secured Loan With Credit Union
Many people overlook credit unions when it comes to financial transactions. However, if you need to build credit without using a credit card, they can be a great place to turn to. Credit unions offer secured loans that will allow you to build up your credit. With this type of loan, you are going to put a certain amount of money down as a deposit. This money is going to act as the collateral for a loan of the same value. You can then use the money from the loan for anything that you need. As long as you repay the balance and make your payments on time, this is going to help you build up your credit.
2. Peer-To-Peer Loans
Another technique that you can use is a peer-to-peer loan. With a peer-to-peer loan, you are going to be borrowing money from another individual that has extra money to lend. You can access this type of loan for one of the many peer-to-peer lending sites online. You will be able to post your loan request on the site and lenders will be able to bid for your business. This is not like working with a traditional lender, but it can still help improve your credit.
3. Federal Student Loans
If you are going to be attending college, Federal student loans can be a great way to pay for it. At the same time, these loans can be helpful when trying to build up your credit profile also. Federal student loans are one of the few loans that you can get that do not have any credit requirements associated with them. This means that as long as you do not have any outstanding debt with the federal government and you are a United States citizen, you can get this type of loan. If you continue to make your loan payments on time, this is going to significantly help your credit score.
4. User on Credit Card
You could also potentially become an authorized user of someone else's credit card. This would mean that you would not have to open a credit card account under your own name, but you could still use someone else's. This is a common arrangement for many parents that want to give a child access to their account. This is going to tie your credit history to the account and help you build your score.
5. Be a Cosigner
Another strategy that you might want to look at is becoming a cosigner. If you cosign for a loan, you are going to have your credit affected just as much as the person that is taking out the loan. If you choose someone that uses credit wisely, this can help you boost your credit score at the same time.
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