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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?

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8 Responses to “How does someone build credit without a credit card?”

  1. Madoff said :

    More than 50% of people never carry a balance on credit cards and pay in full each month.
    These are the people that generally have awsome 800+ scores.
    They have never paid a penny interest or any annual fees.
    And some cleverly get up to 5% cash back (free money), from their cards.

    Get a card. Just pay in full each month so you never pay interest and get a top rating.
    Buy things you need like gas or food only.
    Some people that get in debt are impulsive and buy things that they don’t need on the card.

  2. Dixie Darlin' said :

    For people who do not have a credit card and pay for everything cash they do not have a credit rating.

    In order to have a credit rating you have to have credit cards or installment loans. Also you have to use your credit, a long time of inactivity one your credit report will lower your score. You need recent account history

  3. Desert Horse said :

    buy a house

  4. Alexandra said :

    First of all, you do not need a credit card to build credit. Any type of loan will build your credit.

    If you do not have any credit, it is much harder to get approved for a loan and usually a credit card offers the easiest way to start building your credit. Especially a secured credit card since anyone can get approved for a secured credit card.

    In regards to your question about applying for an apartment rental without a credit card, it does not matter whether you have a credit card. What matters is whether you have good credit history. If you do not have good credit history or have no credit history then you will be asked to have a co-signer and/or place a larger security deposit in order to get approved for the rental.

    It is not true that not using your credit card you do not build up your credit history. However if you close your credit cards then they stop reporting every month that you are in good standing to the credit reports which does not help you in continuing to build up your credit.

  5. expert 2009 said :

    Get in the habit of checking your credit report regularly (at least annually). You are entitled to a free credit report from all three credit bureaus once per year, so take advantage of this opportunity. Review your credit report for errors and dispute any erroneous information. Such errors might be unnecessarily dragging down your score.

    Creditors view these kinds of accounts as a sign of stability and responsibility, so make sure you have one or both of them. Free checking is almost an industry standard, so you can find a good deal if you shop around at different banks. A current checking or savings account will also help you secure a payroll loan.

    If you do not qualify for a credit card or loan on your own, you might do better with a co-signer with good credit. The best part of having a co-signer is that his/her good credit partially becomes yours. That means you have a great opportunity to boost your score by piggybacking on someone elsels credit for a while.

    When you cannot qualify for unsecured credit cards, think about starting off with a secured card. Make sure you get a secured card that reports your activity to the credit bureaus so you have a chance to rebuild your credit. The best secured cards turn into unsecured cards with more favorable terms after you demonstrate responsible use and payment behavior for a certain period. A secured card can also be a great alternative to a payroll loan in emergency situations.

    Keep your balances low and pay them off every month. You want to keep your balance-to-limit ratio as low as possible.

  6. Bryan 2 said :

    You might want to check all answers for this question here

  7. Miss Easley said :

    You can build your credit by getting a free debit card. Some of these programs help you build a positive credit file by reporting the regular bill payments you make with your debit to participating credit reporting agencies

  8. Rodney said :

    That is a great question! You can build credit through secured installment loans (usually through credit unions). Try to steer clear from finance companies. They are a higher risk and usually charge higher rates.

    The best way to build credit, however, is through secured credit cards or secured installment loans. Revolving credit (credit cards) have a very high impact to what your credit score is, because it takes more responsibility to handle credit cards (i.e. fluctuating balances, payments, rates).

    If you are attempting to purchase a house in the future, you will need to establish at least 3 accounts on your credit report and pay on them for at least 12 months. The mortgage guidelines are very strict now.

    Make sure that you pay your cards off each month and DO NOT have any 30 day late payments.

    You can go to http://www.800express for more information on secured credit cards. Also you can go to to get additional information on building credit.


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