How to Increase Credit Score without Using Credit Card?

Your credit score is a numerical representation that indicates a cardholder's creditworthiness and plays an important role in determining rejection or approval for an individual's loan and credit card application.

CIBIL score, a three-digit numeric value is the most important consideration for getting approvals for any credit facility. Your CIBIL score summarises your credit transactions in the past. Maintaining a healthy credit report and timely repayments could help in maintaining a good CIBIL score.

Since your credit score depends on your history of managing different credit facilities, credit card usage is usually taken into consideration while determining your credit score. However, it is important to note that you can have a good credit score even without actually having a credit card.

5 ways to improve credit score without actually owning a credit card:

1. Opt for a bank loan:

In order to fulfill your financial needs, you can either approach a bank or a non-banking financial company to seek a loan. After your loan application is approved and you get the loan, remember to make regular EMI payments without giving it a miss as this will help increase your creditworthiness. Missing out on EMI payments can negatively impact your credit rating.

2. Pay all bills on Time

Paying bills on time can help in improving your credit score. Never miss the deadlines for bill payments as it can hamper your credit score. Timely and regular bill payments can help you in building a credit report so that you can assure the lender that you don't skip payments and are very diligent with making repayments.

3. Stable job

Many personal loans need the minimum income criteria to be fulfilled along with a reliable job before finally approving your loan. Even when you know you are earning from additional sources or investments, never quit your permanent job as the other sources are not considered reliable and the lender could dismiss your application for any credit facility.

4. Good rental payment history

If you stay in a rental accommodation you can use your rental payments history to convince the lender about your creditworthiness. Just like other payments, timely and consistent rental payments can justify that you don't skip paying the dues.

5. Prefer a Peer-to-Peer lending loan

A P2P lending loan is a loan where lenders meet borrowers through online lending platforms. P2P lending is an alternative to traditional financial; institutions such as banks or NBFcs. Peer-to-peer (P2P) lending enables individuals to acquire loans easily. Consider paying all the dues in a timely manner can improve your CIBIL score.