5 Ways To Build A Strong Credit Score Without Credit Card

Credit Score & Credit Report

The CIBIL Score, which represents your creditworthiness, is a three-digit numerical summary of your CIBIL Report. This is based on your credit history and payment history, which are crucial components of your profile because previous behavior is often viewed as a predictor of future behavior.

A credit report is an in-depth account of a person's history regarding his credit market actions. Credit bureaus keep track of all of their client's actions and convert them into a number between 300 and 900. This figure aids lenders in assessing the risk involved in making a loan to a certain creditor.

 

Why Is Credit Score Important?

As mentioned your creditworthiness is demonstrated by your credit report, which is controlled by the Indian credit bureau (CIBIL). The likelihood of getting a loan or credit card application acceptance increases with the credit score. CIBIL creates credit reports based on credit data that is routinely gathered from banks and other financial institutions. The only time the government has access to your credit report is if you request for a loan.

How to generate a credit score?

Paying bills on Time:

Paying your bills on time will help you raise your credit score. Don't skip payments or pay late because a good-standing account might damage your credit score for ten years after it is paid off and closed. Paying regular bills helps in building a credit report and also demonstrates to lenders that you don't have a pattern of skipping payments and may be a good long-term credit risk.

Reporting rental payments

Similar to other payments, rent has a big impact on your credit record. Additionally, you should be aware that information about rent payments can only be used by credit rating companies if it is disclosed to them. Rent payments won't appear on your credit report if they are not submitted to a credit bureau. In order to report your rental payments to credit rating agencies, you must ask your landlord or property manager to do so.

Take a Loan

One way to prove you're a good credit risk is to borrow money and repay it on time. Credit reporting agencies want to know that you can properly handle an installment account because the bulk of loans is documented as such. As long as you consistently make on-time payments on your personal loans, you can raise your credit ratings over time.

Apply for a Secured credit card

Credit cards that are secured by a fixed deposit are known as secured credit cards. Because these cards need a cash deposit upfront, they have higher acceptance thresholds than unsecured credit cards. Typically, the amount of this deposit equals your available credit, thus a deposit of Rs. 50,000 gets you Rs. 50,000 in credit.

Secured credit cards are a great way to build your credit score because they reflect your history of timely bill payments and credit usage. You may be upgraded to an unsecured credit card automatically after demonstrating your creditworthiness by consistently making on-time payments on your secured credit card, or you may request an upgrade from your credit card provider.

Keep Your Job

Your job, in addition to the methods already discussed, is a significant factor in credit score building. Employment does appear on your credit record even though it has no impact on your credit score. Before granting a credit application, several creditors need a consistent employment history.

Bottom Line

One of the key elements in creating a high credit score is solid payment history. Responsible usage of credit products leads to healthy credit. If you want to establish a strong credit history and credit score, you can't completely avoid taking out credit. The prudent use of credit products results in healthy credit. Above mentioned are a few ways by which you can build a credit score without