There are times when you need urgent funds to overcome a sudden mishap in life. The very first thing you do is to contact your friends and family for monetary help, if you are denied help from there the next obvious option will be to apply for a loan. When you apply for a loan, you happen to understand that your loan cannot be sanctioned as you do not have a credit history. Now you are in a fix, you have made all your past transactions in cash, never opted for a loan and have zero debt on your name, but how come you are getting a loan denied? Then you try understanding the bank’s process of sanctioning you a loan and learn that a credit score plays an important role in your background verification process.
Now that you have an understanding on credit score and its importance, you try hunting for options to establish and build your credit score. The very first option you come across is opting for credit cards. In all your past transactions you have made all your payments in cash and are not comfortable opting for a credit card. But is there another simple way to build a credit score? How do I get more options? Are these options safe?
Today we will give you insights on building your credit without using a credit card,
There are a lot of financial products available in the market which are safer than a credit card and also can help you enhance your cibil score in no time. There are a lot of people who for sake of credit score enhancement take credit cards without understanding the technicality of the same and end up hampering their cibil score.
These are the financial products which will help you with positive cibil score calculation,
- Apply for a small loan
This is one of the greatest options available which will help you enhance your score. Your existing bank has a variety of loans to offer, you just need to ask for a secured loan where the repayment terms are good and also will help you build your credit score. This completely depends on the relationship with your current bank.
- Apply for a consumer durable loan
This is one of the easiest ways to get your credit score on and going. You just have to land up in an electronic store and buy any product on consumer durable loan. Consumer durable loans are interest free for tenure up to 24 months and also help adding up good score to your credit. It has the easiest processing of loan and your loan gets sanctioned within minutes.
- Contact utility providers
Utility providers like cable TV, mobile phones, etc. only report delinquencies, not if you make all your payments on time. If your utility provider reports positive remarks to the bureaus there are chances of your cibil score seeing a good hike. You need to contact them and ask them to report every transaction to the bureau. Even if the utility providers do not agree to add positive remarks on the report, one can always ask for reference which is mandatory for them to provide. This can help you in ways while applying for a new line of credit.
- Personal loans
Your existing bank will give you a lot of financial offers taking your saving balance into consideration. There are high chances you will be having a pre-approved personal loan on your account which is purely sanctioned on the basis of your existing balance. You can opt for a very small amount as personal loan and because personal loans are unsecured types, your credit score also gets a good boost if the repayments are made on time.
- Rent(Maybe)
The credit bureaus also take your rent payments into consideration which can add up on your cibil score. You will have to report your rent payments to the credit bureaus and they will make an entry on that as well. It will not give the boost you expect while a lender tries seeing your report, but can this practice can help you in long runs.
There are many other ways as well by which you can establish a good credit score without taking help of a credit card. What really matters is how you make your repayments and are they made on time without surpassing the deadline. As there are many ways to get going to build a good credit score, but it takes a lot of integrity to maintain the same.
