It is a common misconception that credit cards are the only way to begin to build a credit score. Credit cards are common and commonly thought of as a tool used by people a lot, but they lead you to think they are the only option. If you do not want a card or just do not qualify yet, there is no issue! You can easily begin building your credit history by other means. This blog outlines some easy simple ideas to improve your credit score, and none of them use a credit card.
1. Take a Small Personal Loan and Repay It on Time
A personal loan is one of the simplest types of credit you can get, whether from a bank or an online lender. If you take out a small amount and pay it back fully and on time, it can really help you establish a solid credit history.
What to keep in mind:
- Borrow only what you can afford to repay comfortably.
- Choose a short repayment period so the loan closes sooner.
- Always make your EMI payments on or before the due date.
This shows that you are a responsible borrower, which can reflect positively on your credit score.
2. Use a Consumer Durable Loan
You will find that many electronics and appliance stores have some pretty convenient EMI plans when you’re looking to buy things like phones, TVs, or refrigerators. These are known as consumer durable loans. They typically involve very little paperwork and can get approved in no time. Plus, as long as the lender reports your loan to a credit bureau, your repayments can actually help boost your credit profile.
How to make it work:
- Choose a low-value item if you’re just getting started.
- Check if the EMI plan is being reported to the credit bureau.
- Pay all EMIs on time without missing any.
This is a good way to show responsible behavior with credit, even without a credit card.
3. Take a Credit Builder Loan
A credit builder loan is designed especially for people who are new to credit. In this type of loan, the bank or lender holds the loan amount in a fixed deposit or savings account. You make monthly payments toward the loan, and once it’s paid off, you receive the full amount.
Since this type of loan is low-risk for lenders, it’s easier to get approved even with no credit history.
Why it helps:
- Every payment is reported to the credit bureau.
- It builds a record of on-time payments.
- It helps you develop a habit of paying regularly.
Not all banks offer this yet in India, but some NBFCs and fintech platforms have started to provide it.
4. Become an Add-On Cardholder or Authorised User
If someone in your family has a credit card and good repayment habits, they can make you an add-on cardholder. This means you get a card in your name, but the main cardholder is responsible for paying the bill.
In India, a lot of major banks offer this facility.
How it helps:
- The primary card’s payment history may appear on your credit report.
- You benefit from their good credit habits.
- You get access to credit, but under shared control.
Make sure the primary cardholder always pays the bills on time. If not, it could hurt your credit too.
5. Pay Your Utility and Mobile Bills on Time
Typically, utility payments like your electricity or mobile bills don’t get reported to credit bureaus. However, some credit bureaus and fintech apps are now starting to factor these payments into your credit behavior. There are even platforms that provide ‘credit score builder’ features, allowing you to track your rent, phone, or utility bill payments to help you improve your credit score.
Here’s what you can do:
- Use the same mobile number and address for all your bill payments.
- Make sure to pay your bills before the due date each month.
- Choose platforms that offer reporting services to credit bureaus.
While this approach alone might not be enough to create a robust credit score, it certainly helps to add some positive signals to your overall credit profile.
6. Start a Fixed Deposit-Backed Loan (Secured Loan)
If you don’t qualify for a personal loan or credit card, consider taking a loan against a fixed deposit. This is a secured loan where the bank lends you money based on your FD amount.
Since the bank’s risk is low, approval is quick, even if you have no credit history. Your repayments are reported, and regular EMIs help improve your credit score.
What to know:
- You can borrow up to 90% of your FD amount.
- Your FD continues to earn interest during the loan.
- There’s no need for income proof or high eligibility.
It’s a smart and low-risk way to start your credit journey.
7. Do a Regular Credit Report Check
No matter which method you choose, keeping track of your credit report is important. Your credit report shows all your active and closed loans, repayment history, and overall credit behavior. You can also do a free credit score check, and by doing it, you may see if your activities are being reported properly and correct any mistakes early. You can check your report once a year from each credit bureau. Some apps and banks also offer score tracking tools that are updated every month.
Final Thoughts
No credit card is needed to get your credit score started !! There are many nice, simple, and safe ways to get started. Each of the above-mentioned measures can help you build a great credit history. Pick one or two that fit your lifestyle and make sure you stay on top of payments. Before you know it, your credit score will increase, which will make it easier for you to acquire better financial opportunities in the future.