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How does someone build credit without a credit card?

charlt · 11 · 2465

charlt

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I am thinking of those who do not have a credit card and pay for everything by check and cash. How is their credit rated? Is it based on a loan for example (car, student, etc.) and what if it is their first time applying for such a loan? How is their credit history looked at then? What if someone is applying for an apartment rental and does now own a credit card?

I have always wondered this.

Also, some people, after having paid off their debt, switch to using cash or check only, but apparently no activity at all on your credit card accounts isn't good either.

Any input?


hanne

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Reply #1 on: May 01, 2010, 01:36 AM
i just took out a housing loan and aside from getting my credit card accounts, they also asked for all of my bank accounts, bank branch and details and at least 2 utility bills.

i think (i think lang ha) better nga walang credit card e. madalas kase sa credit nagkakautang ang mga tao.  :hihi:as long makita nilang regular saver ka and hinde biglang naglalaho ang pera mo sa banko and that na-maintain mo over a long period of time yung mga utility bills mo (di ba may bill number yun?) baka pwede na yung batayan.

pero hintay tayo, baka merong mas may alam. assuming lang ako e :D


 :help:


nidaime

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Reply #2 on: May 01, 2010, 02:04 AM
I guess the best person(s) to answer this are the ones who work as a C.I. coz all we can do is speculate since wala pang credit rating dito sa Pilipinas.

Last time I checked the news, alam ko in process na ang paggawa ng credit rating agency dito? Nasign na kasi ang bill for this around 1-2 years ago.


mjwinxsky

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Reply #3 on: May 01, 2010, 03:39 AM
same question here, pano ba nila nichecheck ang credit standing mo kung never ka pa napag own ng credit card?


pulubing_palaboy

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Reply #4 on: May 01, 2010, 10:44 PM
the bottom line question is do you have the capacity or capability to pay
kahit walang credit history, pag nag apply ka mang utang, may pambayad ka ba?
kung may pambayad ka, mukha bang responsable ka sa pag bayad?
ano ang pwede mong ipakita na katunayan na responsable ka
you have to understand that the creditor is taking a risk
therefore, the creditor wants some degree of reasonable assurance that he/she/they will get his/her/their money back with agreed upon interest and payment schedule
« Last Edit: May 01, 2010, 10:45 PM by pulubing_palaboy »


naomibatac

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Reply #5 on: Feb 13, 2012, 10:31 PM
Building credit history is base on your performance with having credits or loans and paying them at the right time such as car loans, housing loans, credit cards etc.


freelancer_babe

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Reply #6 on: Feb 13, 2012, 11:32 PM
Some say checking accounts also build credit history, it's an alternative to credit cards. I am not sure on that though.

But for sure, if you have troubles with your checking accounts, it is reflected in the negative database, similar to the ones who have defaulted on loans and credit cards.

Building credit history through credit cards is the most common way these days to easily get approved on bigger loans, but this route simply helps and it isn't the only way. You can also build credit history through other bank loans - like a personal loan, housing loan, business loans and car loans.

Remember, credit is money borrowed. You can't build credit history if you are paying by cash or through debit/ATM cards.

Apartment rentals are not paid using credit cards. They are by cash or post-dated checks.

How is credit rated or how to determine credit standing? It is based on "5 C's of credit" (just google this one).
« Last Edit: Feb 13, 2012, 11:36 PM by freelancer_babe »


naldcagape

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Reply #7 on: Feb 14, 2012, 12:10 AM
the bottom line question is do you have the capacity or capability to pay
kahit walang credit history, pag nag apply ka mang utang, may pambayad ka ba?
kung may pambayad ka, mukha bang responsable ka sa pag bayad?
ano ang pwede mong ipakita na katunayan na responsable ka
you have to understand that the creditor is taking a risk
therefore, the creditor wants some degree of reasonable assurance that he/she/they will get his/her/their money back with agreed upon interest and payment schedule
Like what pulubing_palaboy said. The first thing the creditor wants to know is your capacity to pay.

If you have a good salary/job with a Top 1000 company for the past 2 years and no existing loans then you'll likely get approved for a loan that fits your financial capacity.

Currently, each financial institution has it's own credit scoring system. Your credit score goes up the more assets you have right now or the higher your net income. Meaning, the more you don't need the loan, the higher chance your loan gets approved.

Yes, life is not fair. :)


freefront

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Reply #8 on: Feb 14, 2012, 04:28 AM
I've heard this twice already. Young people with very high gross income( one at 370K and another at 580K P.A.):

Take out a personal/multi-purpose loan from their PAGIBIG or SSS to start their credit history, even if they don't need it at all. When they do need it, they already have the knowledge to go about getting one for the big ticket item( like a house).

Where to put the money they borrowed? I guess they are getting pushed to go out there and explore as well.

But for a 22 y.o. girl to receive this advice, I guess pinapako lang sya sa job nya dahil todo ang pa-training sa kanya. It's not likely for her to switch companies if she has responsibilities to pay for, 'ne? Very sneaky H.R. dep't. :D


naldcagape

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Reply #9 on: Feb 14, 2012, 12:31 PM
I think it needs saying...

YOU DON'T NEED TO BUILD A CREDIT HISTORY.

Build a Career or a Business and an Investment Portfolio instead.
« Last Edit: Feb 14, 2012, 12:32 PM by naldcagape »


freefront

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Reply #10 on: Feb 15, 2012, 05:12 AM
^ or as good as what anybody can observe out there---banks will give credit to people with money, and the resources to pay. Hindi dun sa mga walang pera, at sa mga nangangailangan ng pera para makagawa ng kabuhayan. It's almost idiotic, but they are in business of making money, not giving it away.

Instead of a credit history then, you will need a good track record regarding a career as an employee or as a person having a business and/or investment portfolio( I assume banks/lenders would also prefer that you can cover your back with more than 1 source of income)?

IMO, building a credit history is like cutting the time trying to prove your credit-worthiness almost in half. It proves that you have a steady source of income, you save, you have expenses, you make more money to cover  those expenses, you borrow and can responsibly handle the borrowing process. You do those^ things over and over and presto! You are deemed a good credit risk.

It's not only that you know how to earn and save money, but by proving that you know how to use money wisely, maybe, you can be trusted to handle a sizeabe loan by the age of 30 instead of 45?  I'd be grooming a repeat-business kind of customer, if I were a lender  :watchuthink:

It may be a good move to borrow from your SSS and park it somewhere. Consider your loss in the difference of interest rates( if you incur that  loss at all---meron naman sigurong ROI dyan na mas mataas sa lending rate mo) as tuition fee. Again,  :watchuthink:


 


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