Three Ways to Build Credit Without Using Credit Cards

There are three ways to build credit without using credit cards and increasing debt.

The most common way to build credit is by using credit cards. Making timely payments on debt accounts for 35% of your credit score.  However, there are alternative ways to (re) build credit without using credit cards and increasing your debt.

1. Get a Secured Credit Card As a Way to Build Credit Without Using Credit Cards and Increasing Debt

With a secured credit card, you set the credit limit using your own money. If you want a card with a $500 limit then you pay $500 of your own money as collateral. You can charge up to the $500, but you have to make monthly payments like any other debt payment.  Your payments can be reported to the credit bureaus but you have to ensure the card you use does report.

As you are aware, timely payments on all your debt increases your credit score. Missed payments may decrease your credit score. Your credit score is not just a bunch of numbers. You can be denied jobs, credit, and pay very high interest rates to a creditor for bad credit. What is in your credit score? Do you know?

There are a number of secured credit cards but not all report to the credit bureaus. Here are the top three secured credit cards to rebuild your credit.

2. Take Out A Credit Builder Loan to Build Credit Without Credit Cards and Increasing Debt

A credit builder loan is an alternative to a secured credit card or other ways to build credit that may involve increasing debt. With a credit builder loan, an applicant applies for a specific loan with a specific term (generally no more than $2,000 to be paid over no more than 24 months), makes payments on the loan, which are reported, then receives the funds after all payments are made. https://www.moneyunder30.com/credit-builder-loans

Financial Institutions that Provide Credit Builder Loans

The following financial institutions provide Credit Builder Loans:

1. Republic Bank and Trust
2. Summit Credit Union of North Carolina
3. Randolph Brooks Federal Credit Union
4. Metro Credit Union
5. GTE Financial
6. Digital Federal Credit Union
7. EP Federal Credit Union
8. 1st Financial Federal Credit Union
9. Credit Union ONE
10. Members First Credit Union
11. Philadelphia Credit Union
12. Self Help Credit Union

Non Financial Institutions that Provide Credit Builder Loans

Self Lender is a non financial institution that provides credit builder loans. With Self Lender, the applicant picks a plan to make a monthly payment of $25, $48, $89 or $150. The monthly payments are deposited into a certificate of deposit. At the end of the payment period (one or two years), the applicant receives the balance of his/her payment. The payments are reported to the credit bureaus on a monthly basis.

3.  Rent Payment Reporting Services Companies

Lastly, rent payment service companies are another way to report timely payments and increase your credit score.  Rent payment services will report your payments to the three most popular credit bureaus.

1. Rent Track and Cozy allow tenants to self report rent payments.
2. PayLease works with landlords and reports to the three main credit bureaus.
3. Pay Your Rent only works with landlords and management companies and reports timely rent payments.
4. Clear Now will debit payments from tenants’ accounts and reports to Experian, Equifax and Transunion.
5. ERent Payment bills reports rent payments to credit bureaus.
6. Rentler also reports on behalf of landlords.

Credit Bureaus That Will Report Timely Rental Payments on Credit Reports

Now that you know you can have rent payments reported, you need to know which bureaus accept rent payments activities.

The following FOUR credit bureaus can report timely rental payments on your credit report: Experian, Equifax ,Transunion and Innovis.

Additionally, Experian has its own rent reporting service called Experian Rent Bureau.

Alternative Non Credit Bureau Credit Reporting Agency: PRBC

Pay Rent Build Credit, LLC (PRBC), allows individuals to self report rent, utility, cell phone, cable and other subscription services. PRBC creates alternative credit reports for consumers. PRBC uses a scoring scale of 100 to 850. Any score over 750 is GREAT! Lenders are required to take your alternative credit score into consideration if you ask them to. (http://www.prbc.com).

In conclusion, you do not have to put yourself in debt to improve or build credit. If you are a renter, try to self report your payments. If your landlord uses one of the systems mentioned, authorize your landlord to report your rental payments.

The other two alternatives can be to either get a credit builder loan or a secured credit card. The key is to build your credit and NOT increase your debt. You can improve your credit score on your own (How to Improve your Credit Score: Never Pay for Something You can Do Yourself)

If you want to know how your credit is without pulling your credit report please look at the following FREE links:

Please note that these are affiliate links which are free for you but I will earn a commission if you sign up. 

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Please let The Frugal Biddy know if you try any of the methods discussed. I can be reached at info@thefrugalbiddy.com.