building credit w/o credit cards??

[tx3amigos]

I want to build up my credit without using a credit card.

I have an open account with a tool company which I pay on time and I make my student loan payments on time.

Is this enough to build credit so that I can buy a car in a year or so? Credit Karma gives me a score of 575 (up from 526 in July)

Hate to get a credit card...have none at this time...but would get one if I have to

[Laura]

You Don't have to open a credit card to build your credit. This company will show $5,000 available "unsecured" credit on your report (EQ & TU) they don't report to EX. Once you put in your information and get to the next screen, it will show you in detail the program. go to "oxp.to/NCC"

[tx3amigos]

not sure about doing this...National Credit Consuling

Edited October 12, 2010 by tx3amigos

[Denita]

Don't do it...in general beware advice by newbies - especially their first post. Could be a bot or not.

Read the stickies here. To improve your score you really need to do two things:

1) repair the old 'bad' credit

2) rebuild with new tradelines

Having said that, you do not need large tradelines. Just one or two small credit lines that you do not keep a balance so your utilization is good.

Look up some of the threads here where some of the posters have discussed opening a savings account in a credit union and then borrowing against the account and repaying it back on time. It is not a credit card, but an installment loan. You could try one of the basic credit cards, like a Best Buy card for $500 or some small limit.

[Proj1423]

Get a secured credit card, but know what a "secured" credit card is.

Two types:

1. Sleeze banks will give you a card and call it a secured card. They will ask for no money up front, maybe just monthly or annual fees. The day you receive the card it is already maxed to the limit. You'll get a $300 credit card with a balance of $300 on it. The second you use it to buy something, you are over the limit and your rate goes higher (if possible) and a fee will be added to your monthly payment. You should know where your credit goes from here.

These cards are only EVER good if you know exactly what you're getting into. You get the card and start making payments to pay it off. Just know that it is less of a credit card and more of a loan where you never really see the money you are borrowing. If you get the card and pay it down to 50% or less of it's limit then it could be helpful. Since the card starts at 100% of the limit on day one, your credit is instantly damaged.

2. A real bank (I know Bank of America and Wells Fargo used to have them. Haven't checked in a while) will offer a secured account. You will put the $300 - $500 down in cash or check. They'll give you a credit card with a balance of $0 and a credit limit equal to the amount you paid.

If you are only using the card to build credit, do not use the card to buy expensive items. I tell people to buy only one thing with a secured card. Tic-tacs. Use the card to buy very small-priced items at the gas station once per month(don't use it to buy gas). This ensures that the payment never gets out of hand and you keep the balance-to-credit limit ratio extremely low. That's good for your score. After 6-12 months of on-time payments, the bank will offer to make the account unsecured by sending you back the money you paid.

I love these cards because it's a way to get something for nothing from the credit card companies. You use them to build your credit by getting on-time payments on your credit report, but they don't get large payments of interest because you keep the balance at zero every month.