How to Build a Credit History If You Don’t Have Any Existing Loans

By | March 24, 2021

So you’ve never taken a loan and are wondering how to build your Credit Score? Read on and discover alternative ways to create a credit history for yourself.

How to Build a Credit History If You Don't Have Any Existing Loans

Today, the Credit Score has become a vital part of the banking world. Lenders swear by it and consumers want to stay updated with it. There’s no doubting its importance and significance in today’s credit market. When this is the case, one wouldn’t be surprised to see individuals who have never taken a loan or Credit Card in the past feel a little left out – because they have no record of a credit history so far, and this obviously means they have no existing score.

What do you do if you want to establish a credit history or build a Credit Score? Here are some simple ways you can create a credit history for yourself.

  • Get a Low Limit Credit Card with your bank

Assuming that you’re a salaried employee, you can think of going in for a low-limit Credit Card with the bank that maintains your salary account. Since the bank already has proof of your regular income, the application process will more or less be a smooth one.

Once you get your Credit Card, all you have to do is maintain it responsibly. This means paying off your bills on time and staying within the 30% credit utilisation ratio. If you ensure you meet these expectations and keep it up for six months, you’ll definitely kick-start your credit history with a desirable score. But don’t stop there though. Keep up the regular payments every month to ensure that your score doesn’t dwindle.

Additional Reading: All About Your Credit Score

  • Opt for a secured card

Another way of building your Credit Score is to pick up a secured card. Here’s how it works; you deposit a specified amount (let’s say Rs. 30,000) with your bank. The bank then issues you a Credit Card with the same limit. Easy-peasy!

  • Buy a gadget on an instalment basis

Fancy a phone upgrade? Why not ignite your Credit Score with your purchase! Electronics stores usually offer consumers a consumer-durable loan to those who wish to buy phones or other durables in instalments as opposed to the usual down payment method.

Now, let’s assume you’re planning to pay for your phone in 12 monthly instalments. In six months, your Credit Score will start taking shape.

Maintaining your Credit Score

Keep in mind that simply kick-starting your credit history won’t do in the long run. You’ll need to maintain it in a way that doesn’t hamper your progress.

Here are some don’ts you can keep in mind when it comes to maintaining a healthy Credit Score.

  • Don’t delay Credit Card payments – This will negatively impact your score
  • Don’t ignore bill alerts – It’s one thing to delay your card payments and a whole other thing to just ignore it. Defaulted payments can hurt your score to a great extent, so make sure your bill payments are made, and on time, of course.
  • Don’t max your credit limit – Experts recommend that you stay within 30% of your allowed credit limit, so if your card gives you a limit of Rs. 40,000, make sure your expenses are within Rs. 12,000 if you wish to see your Credit Score grow healthy.

Additional Reading: 6 Biggest Credit Score Mistakes Millennials Make in Their Early 20s

How to track your Credit Score

Alright, so now that you know how to create a credit history and also have a checklist of mistakes to avoid, all you need to do is regularly track your Credit Score. How do you that? Well, we’re glad you asked.

Checking your Credit Score on is easier than ever before – and it takes less than three minutes of your time. Try it now to believe it. Don’t be disappointed if you don’t have a score yet; you can build your history and come back here in six months and check your score again. The best part is you can check your Credit Score for FREE as many times as you like.

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