Getting Creative With Your Credit

Some ways to build credit without a credit card

You know by now just how impactful a credit score is on your life. If you want a mortgage at a competitive interest rate, you better have a good credit score. Do you want a car loan that’s well-priced? Hope that credit score is the equivalent of an A on a kid’s report card. One great way to improve your credit is to use a credit card. However, as USA Today reports, sometimes credit cards do more harm than good. The ability to spend easily can be more than some people can resist. There’s a reason the average household now carries $16,000 in credit card debt. If you’re one of those people who have a tough time handling credit cards but you still want to maintain a high credit score, try to do the following.

  • Don’t be late on bills. Paying bills — like utilities — on time is a great way to build your credit. Lenders will love seeing that you never missed a payment with other companies because that indicates you’ll never miss a payment with them. Want to make paying bills on time easier? Set reminders on your calendar. Also, if possible, set up autopayments so being late isn’t even an option.
  • Report your rent. Along the same lines as paying your bills on time, if you’re in the habit of paying your rent in a timely fashion, make it known! Use a rent-reporting service, like RentTrack, which monitors your payments and sends them along to the credit bureaus. The key here is using anything that shows you’re responsible with money to your advantage. Paying rent on time is a good thing, so use it.
  • Get some help. If you know a loved one that wouldn’t mind adding you to their credit card as an authorized user, ask them to do it now. Authorized users can use the card just like the primary user, and better yet, get a boost from the primary user’s good credit. The best part? You don’t ever have to use the card. You’ll benefit from the primary cardholder’s moves.
  • Take a loan. Credit unions offer something called credit builder loans that are exactly what they sound like. You take out a small loan that is held by the credit union. Once you pay off the loan, you have access to the funds. These loans are usually available to those with poor or no credit.

Chris O'Shea

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