how to build good credit building blocks

How Can You Build Credit Without A Credit Card?

It’s not that difficult to build credit without credit card facilities, and Mississippi Title Loans, Inc. will show you how. Your credit score is how lenders determine your trustworthiness, so building your credit matters in the long run.

This article will provide you with the steps to build credit without using a credit card. Then, you’ll learn how long it takes to build credit and how you can borrow money for emergencies, in the meantime.

3 Steps To Build Credit Without A Credit Card

Using a credit card is an excellent way for most people to build credit, which is why it’s also one of the most popular ways to do so.

Despite that, you can still build credit without using one at all.

person checking credit score online

Here’s a 4-step process to building credit that doesn’t involve using a credit card:

Establish Credit

Building credit shows lenders that you can be trusted to borrow money. To do that, you must first establish your access to credit.

In other words, you’ll need to get a lender or other financial institution to trust you with some credit so you can show them you’re trustworthy.

Here are two ways you can accomplish that without a credit card:

  • Use credit-building loans: Some lenders offer loans specifically for credit-building purposes. These products typically have more lenient requirements and cater to people like you who want to establish a credit history.
  • Report alternate payments: In some cases, how you treat your other financial commitments can also factor into your credit. For example, student loan payments, car loans, rent payments, and phone bill payments can also demonstrate your trustworthiness. Check with your preferred credit rating agency about reporting these alternate payments.

In simpler terms, these two approaches can help you ‘get your foot in the door’ so you can establish your credit history. With good credit behaviors, lenders will be more likely to trust you with more credit in the future.

Make All Payments On Time

Once you can access credit, the most important thing you must do is make all your payments in full and on time.

So, here are a few crucial tips to remember:

  • Read the terms and conditions of your loan or other credit facility.
  • Identify the deadline for each payment.
  • Set a reminder a few days before each deadline so you don’t miss them.
  • If possible, automate all loan payments so you don’t forget.
  • Ensure that you have the money to meet each payment deadline, no matter what.

There’s nothing wrong with making your payments early, but you must be diligent not to pay even a moment too late.

Late payments will reflect negatively on your credit report. As a result, you’ll spend even more time building your credit up to whatever score you target.

Monitor And Wait

Lastly, keep an eye on your credit and be patient. Again, remember that the purpose of your credit score is to show lenders that you’re trustworthy and can manage credit well.

Unfortunately, building that record will take a significant amount of time. Do it right, and you’ll have a much easier time borrowing money in the future.

How Long Does It Take To Build Credit?

Generally, you’ll see improvements in your credit score after 6-12 months. That’s how long it takes for your payments to show that you’re handling credit well.

However, the time frame depends on several factors. 

For example, it depends on a starting point. If your credit was very low initially, you may need more time before it reaches a good number.

It also depends on your target number. The higher you want your score to be, the longer it’ll take to achieve it.

Can I Borrow Money With Bad Credit?

Suppose you currently have bad credit and need to borrow money, in the meantime. In that case, you can still borrow money with bad credit.

You have several options, including title loans, payday loans, and signature installment loans.

man cutting his credit card

Here’s what you need to know to decide which loan best fits your needs:

  • Title loans: This type of loan uses your car’s lien-free title as collateral to secure as much as $2,500. You’ll need a driver’s license, the car’s title, and your vehicle for an inspection to get one of these loans.
  • Payday loans: This type of loan is an alternative that doesn’t require collateral. You can borrow as much as $400 with your license, latest pay stub, and a blank check from your account.
  • Signature installment loans: This type of loan can give you up to $1,250 using your driver’s license, proof of income, and a checking account statement in your name.

These loans can help provide urgent cash while you focus on building up your credit using other methods.

Get Started Now With Help From Mississippi Title Loans, Inc.

You’ll need a lot of time and patience to build credit without credit card facilities, but it’s doable. The credit score you achieve as a result of that process will help you access other finance options in the future, perhaps to buy a car or a house.

In the meantime, Mississippi Title Loans, Inc. is ready to help when you need cash urgently. Whether you need a title loan, payday loan, or signature installment loan, you can start the process anytime by submitting the online form. Then, a representative will call you back soon after!

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.

Daniel Dewitt

Daniel Dewitt is a lifetime blogger with a finely-honed ability to break down, analyze, and interpret economic trends for the layman. He's fiercely invested in spreading financial literacy and helping everyday people gain the tools they need for their own economic success.