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Nowadays, building a good credit score has become necessary for every borrower, but for this, having a credit card is only an option, not a requirement. With the right strategy and timely payments, a strong credit profile can be created even without a credit card. Small loans, regular EMIs and responsible financial habits gradually establish you as a trustworthy borrower.
New Delhi. The credit system in the country is changing rapidly and banks and NBFCs are now making loan distribution easier through technology. In times like these, having a good credit score has become more important than ever. Many people think that they can improve their credit score only by having a credit card, but it is not so. With proper planning and responsible steps, a strong credit profile can be created even without a credit card, which proves to be very useful for personal loan, home loan or credit card in future.
Start with small loans and timely payments
If you do not have a credit card, you can start with a small personal loan or a secured loan from a fixed deposit. It is most important to repay the EMI of these loans on time, because even a single delay can spoil the credit history. Timely payment of EMI offers from e-commerce platforms or Buy Now Pay Later (BNPL) services also helps in improving your credit history. Along with this, paying all the liabilities like electricity-water bills, mobile, rent and subscription on time is an easy way to strengthen the credit score.
Score will increase with continuous earning and discipline
A stable job and regular income makes your credit profile more reliable. Also, you should avoid applying for multiple loans or credit cards at once, as there is a ‘hard inquiry’ on every application, which can damage the score. A free credit report is available once a year, by checking which you can correct any mistakes or wrong entries. This vigilance prevents the score from getting spoiled in future and makes your profile stronger.
When will you see results and why does this method work?
Credit bureaus track your EMIs and payment habits even without credit cards. When they see your small loans repaid on time, your creditworthiness will automatically increase. However, this change doesn’t happen immediately—the impact usually begins after six to twelve months of responsible repayment history. Ultimately, timely payments, smart borrowing and proper use of alternative credit channels are the easiest and most effective ways to build a good credit score without a credit card.
