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How to Build Credit without a Credit Card
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Arianna
Student Contributor
Posted May 2, 2019
Building credit can take a long time and requires a lot of discipline in most cases. Sometimes people want good credit, though having a credit card may not be the best route to go at that moment. Fortunately, there are plenty of other ways to build credit that don’t necessarily take the same amount of discipline as having a credit card. Here are a few examples!
Request that companies report your monthly expenses
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Most of us are paying for monthly expenses in general for things like water, phone, and/or cable bills. For many of our monthly bills, we can request that our providers report our payment to Experian, one of the main credit reporting companies. That way your payments are going on your credit record and it’s showing how responsible you are. This is a great option especially if you have already had many on-time payments that can be reported. For more information on how to report utility bill payments, visit https://www.experian.com/blogs/ask-experian/.
Get added to an existing credit line
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Know a close family member with phenomenal credit? Ask to be added to their line of credit. A lot of time this happens with parents and children in order to build up the child’s credit before they begin building it themselves. You’d pretty much be “piggybacking” on their payments and building your own credit history. This person should be very responsible, with all of their accounts being in good standing, so that you’re not allowing someone else’s history to hurt your credit.
Take out a reasonable auto loan
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Looking to purchase a car? A great way to establish credit is by taking out an auto loan and paying it back each month. While paying for something in cash is great, why not choose to build credit knowing that you already have the funds to pay it off? You could get a car loan and divide your existing money up to pay the loan off early. If you can afford to take the time to pay off the loan instead of buying it in cash you could boost your credit score tremendously. When it comes to credit, time is on your side and the more positive history you have over the years, the better.
Pay your student loans
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Another great way to build credit is to begin paying back any student loans you’ve taken out during school or by making on time payments after you graduate. Student loans can be very overwhelming for some, especially those who have thousands of dollars in loans. Some students also can forget to prepare for paying their loans back after graduating and may end up needing to defer them again. The best way to get on top of your student loans is to set up automatic withdrawals to ensure that you’re paying on time. If you seem to be struggling to keep up with payments, set up a payment plan that works with your budget and doesn’t hurt your credit.
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