Customers often get a travel credit card or a cashback credit card to build their credit and obtain viable financial products in the future. However, your plan may suffer a setback if you don’t have a good credit score to qualify for a credit card. But don’t worry. Getting a credit card to build your credit score is not the only option.
You can explore different ways that help you build a strong credit profile. Let’s take a look at some of the ways how you can build credit without getting a credit card.
Credit Builder Loan
If your credit score is not up to the mark, you can consider getting a credit builder loan. When applying for such a loan, your lender will put an entire amount of your loan into a secure account. Unlike a regular loan, where you receive the loan’s proceeds immediately, a credit builder loan requires you to pay off the loan amount first in set installments and then receive the loan’s proceeds.
The lender will deduct any fees at the end of the term. The primary purpose of such loans is to build credit because it shows that you’re paying your dues regularly without spending anything extra. The payments are reported to the credit bureaus, which helps boost your score.
Personal Loan
You can also apply for a personal loan and pay it on time to boost your credit profile. All you need to do is make payments on time and pay back the loan as soon as possible to ensure you are responsibly fulfilling your debt obligations. Even though these loans have higher APRs, they are one of the best ways to establish a solid credit rating.
Car Loan
Car loans can also be another useful way to boost your credit rating. However, you do need to make payments on time to ensure that credit bureaus notice your responsible behaviour and give you a good rating. Look for a car loan with a low APR and monthly payments you can afford.
Not only you’d get a car at the end of your term, but you’d also build a solid credit profile that will help you with future credit products such as mortgages at favourable rates. Ensuring you make your payments on time is the best way to build a strong profile. Payment history makes up a good chunk of your credit score, so make sure you never skip a payment or drag it past the due date!
Apply for Credit Cards in Canada
Credit cards are still one of the best ways to build a good profile in Canada, and if you can’t get your hands on premium cards due to a low score, you can always opt for a secure credit card.
If you’re planning to get your hands on some of the best Canadian cashback credit cards, head to Great Canadian Rebates. Our platform lets you compare some of the top credit cards in Canada to help you find one that suits your needs and requirements. Visit our website for more information.