How to Establish a Good Credit Without Having a Credit Card

Good credit is important not only for getting approved for credit cards but also for home and auto financing—even for renting a place to live. There are many ways of building up a good credit history. Having credit cards and making timely payments helps the most. But what if you don't have a credit card or never got approved for one? Relax: Here are the steps that you should follow to build up a good credit history if you do not have a credit card.

Difficulty: Moderate

Instructions

Things You'll Need:

• Bank account
• At least $1,000

1. Get a secured loan from your bank. A secured loan is one that the bank gives to you as a personal loan against a deposit of the same amount. Most banks keep the money that you give to them in a fixed deposit in your name. This is the most efficient way of building your credit profile if you do not have a credit card. Getting a secured loan is easy. All you have to do is visit your bank and offer them an amount like $1,000. They will lend you the exact amount in the form of a loan which they will report to the credit bureaus.

2. Make monthly payments on the loan in a timely fashion. This will also be reported to the credit bureaus which will increase your score. Do not pay off your loan ahead of time even if you have the money. Remember you are only playing a trick on the credit bureaus.

3. Pay all your other bills on time. Most companies do not report your timely bill payments to the credit bureaus but all delinquent accounts are reported, so avoid that.

[Rockney]

on 11/24/2008 Good information! 5*!