Having a good credit score has become very important in today’s time, especially when you want to take a loan or avail any financial facility in the future. But many people are not able to build their credit history due to not having a credit card. The good news is that you can easily improve your credit score even without a credit card. You just have to adopt some smart financial habits. Let’s know 5 easy hacks to build credit score even without a credit card.

5 Hacks to Build Credit:

Take small loans and repay on time

If you do not have a credit card, you can take a small loan from a bank or a non-banking financial company (NBFC). Such as a personal loan, consumer loan or education loan. You can get these loans at an interest rate of 10% to 31% depending on your creditworthiness, monthly income and job. If you repay the EMI on time, it helps in increasing your credit score. Lending institutions track your repayment history and report it to the credit bureaus. This has a good effect on your financial discipline and makes it easier to take bigger loans in the future.

Pay electricity, water and rent bills on time

Your home electricity, water, mobile and rent bills can also help improve your credit history. Although these bills do not reach the credit bureaus directly, some rental reporting websites send your rent payments to the credit bureaus on time. If you pay your bills every month without delay, it strengthens your financial record. Many times when you apply for a loan, banks check your financial stability and if your record is good, the chances of loan approval increase.

Use a secured loan or secured credit card

If you are not getting a normal credit card, you can take a secured credit card. This card is given against a fixed deposit (FD), which already provides security to the bank. Apart from this, secured loans are also a good option, in which you can take gold loan, loan against FD or any other guarantee based loan. Repaying these loans on time improves your credit history and makes it easier for you to take unsecured loans in future.

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Take advantage of peer-to-peer lending (P2P)

If you do not want to take a loan from the bank, then peer-to-peer (P2P) lending platforms can be a good option. These platforms give you loans at low interest rates, which you can improve your credit worthiness by repaying on time. Apart from this, you can become an authorized user of someone who has a good credit history. This means that if a trusted person adds you as a secondary user on his credit card, then you will also get the benefit of his good credit history.

Maintain job stability

Your job and your financial stability also affect the credit score. If you have been working in the same company for a long time, it shows that your financial position is strong and you are able to repay the loan. Banks and financial institutions also look at how stable your monthly income is and how seriously you fulfill your financial responsibilities. If your job and income are stable, you can easily get loans and other financial facilities.

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