How can I build credit without a credit card?

A great way to build credit without using a credit card is by taking out different types of loans. Now, we’re not saying you should take out a car or student loan, but if you have them already, that can work in your favor. Making those car and student loan payments on time helps build your credit history and shows that you not only are reliable, but you can use different types of loans for different situations. Also, signing up for utilities in your name helps build your credit. While it won’t establish a credit score, it can help first-time borrowers because it shows a history of responsible financial transactions.

If you’re still curious how to obtain credit without having it, here are two resources that can help guide you in the right direction: “Build Credit – Learn How to Establish a Solid Credit History” and “How to Establish Credit.”

Written by Alex Ziskind, University of Illinois USFSCO Student Money Management Center

Can I get a credit card if I don’t have any credit or a job?

The answer is complicated. Trying to get credit without having credit is a catch-22, because you need credit to build credit. Fortunately, there are some loopholes to this situation.

For one, you can build credit by getting a secured credit card from your bank or credit union. The different between a secured card versus a traditional credit card is that you must deposit money in a savings account before using the credit card. Therefore, any spending you do with the card is “secured” by the money you deposited. Keep in mind a secured credit card is different than prepaid debit card; you can’t build credit with a prepaid debit card, but you can with a secured credit card.

If you’re still curious how to obtain credit without having it or a job, here are two resources that can help guide you in the right direction: “Build Credit – Learn How to Establish a Solid Credit History” and “How to Establish Credit.”

An important law that dictates whether or not you can get a credit card is the Credit Card Act of 2009. This law states that if you’re under the age of 21, you cannot get a credit card unless you have a cosigner or proof of your ability to repay the lender. A secured credit card is also a good way to establish credit if you’re under 21 since it shows you have the ability to pay up to the amount that is deposited in the savings account associated with the secured credit card.

Written by Alex Ziskind and Andrea Pellegrini, University of Illinois USFSCO Student Money Management Center

How can I find employment on campus?

Looking for Jobs on Campus

There are a number of campus job boards available to students looking for employment on campus. Don’t assume that positions only open before the start of the semester – check back for new postings throughout the year.

  • Student Financial Aid Virtual Job Board: This job board is intended to assist University of Illinois students in finding part time employment to help them in meeting their needs while pursuing an education at this University.
  • Assistantship Clearinghouse, Graduate College: The Graduate College Assistantship Clearinghouse lists assistantships that are available to graduate students on the Urbana campus.
  • Research Park Job Board: Employers at the Research park are looking for undergraduate and graduate students to hold internships and part-time employment during the summer and academic year.

Also, reach out to professors and advisors who may have paid research or teaching opportunities. Creativity and initiative can reveal opportunities that you may not have considered!
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What do I need to know about the borrowing process?

Many students and families rely on borrowing to finance their education and Federal student loans are often the primary source of these funds.  The Office of Student Financial Aid (OSFA) encourages students and families only to borrow when it is a necessity, rather than borrowing as a convenient way to finance their educational expenses.

Once a student and family make the decision to finance their educational expenses through borrowing, it is important they make informed and educated decisions about the type of loan(s) to borrow and the amount of borrowing required to pay their educational costs.  Factors that should be considered and discussed throughout this process include: understanding what is means to be a responsible borrower, understanding the types of loans available and the application process for each, and understanding the repayment requirements and options for any loans borrowed.
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What is the difference between federal and private loans?

In addition to Federal student loans, there are alternative educational student loans available from private lenders.  These programs are meant to supplement federal and state aid if you have exhausted all other sources of funding for your education.  Student and families are encouraged to use Federal loans since they usually offer borrowers lower interest rates and have more flexible repayment terms and options than alternative student loans.

An alternative student loan is a nonfederal loan, made by a private lender such as a bank, credit union, state agency, or a school.  The private lending entity provides valuable information about the alternative loan process and interest rate calculations.  This information should be carefully reviewed.