5 Unexpected Ways to Improve Your Credit Score

Credit cards are a go-to method for establishing and maintaining a good score—but not everyone is eligible for or comfortable with them. Whether you’re just starting or would rather avoid debt, there are other ways to build credit without pulling out the plastic. Here are five surprising ways to achieve a higher credit score. 

Signature Loans 

Unsecured signature loans in utah are a great option for borrowers who want to repair or establish credit. These unsecured loans are often used to consolidate debt, cover sudden expenses, pay for home improvements, and finance once-in-a-lifetime vacations. 

Income and credit are the primary criteria for signature loan interest rates. Because these loans aren’t backed by collateral, interest rates may be a bit higher than with other loans. Signature loan terms may range from several months to a few years, with most lenders offering multiple options. 

Credit Building Loans 

A credit builder loan is a great option for someone who wants to establish or repair their credit without using cards. These loans are designed to help borrowers build credit, and they work by holding a small amount of money in a secured savings account. Once the last monthly payment is made, the borrower gains access to their funds. 

The biggest advantage of credit-building loans is that payments are reported to the credit bureaus, helping borrowers establish positive credit histories. These loans are a low risk for lenders, so they’re better for those with little to no credit. 

Secured Loans

An interest only secured loan, or any other kind of secured loan, is another option for borrowers who want to build credit without using cards. Assets like certificates of deposit are used to back secured loans. With collateral, the lenders’s risk is reduced, and some borrowers may find it easier to get approved.

Secured loans come in several forms, including auto loans, home equity loans, and personal loans. Like credit-building loans, making timely payments has positive effects on credit scores. Borrowers should keep in mind that, if they don’t make timely payments, they may lose their collateral.

Rent Reporting 

Those seeking an unconventional way to establish credit often turn to rent reporting services. Many people, especially college students, are unaware that timely rent payments can be used to establish credit. These services report on-time payments to the credit bureaus, helping new borrowers boost their scores. 

To start, a borrower may need to provide rent receipts, a signed lease, or other proof of rental payments. While not all scoring models consider rent payments, many do, making rent reporting a viable alternative for those looking to establish credit. 

Becoming an Authorized Cardholder 

If you’re reluctant to sign up for a credit card, consider becoming a signer on someone else’s account. When a person is an authorized user, the account holder’s credit history and limit are considered. This can help a new borrower establish credit, especially if the cardholder’s history is solid. 

It’s Possible to Build Credit Without Cards 

While it’s sometimes challenging to build credit without pulling out your wallet, it is possible. Whether you sign up for a credit building loan, a signature loan, a secured loan, a rent reporting service, or become an authorized user, these approaches can help you build and improve credit. No matter which strategy you use, patience and consistency will help you reach your goals.