A commonly asked question concerning the matter of building credit score is whether or not opening multiple credit card accounts will help boost the score. This is not necessarily true. Your credit score is based on the credit report which is based on any debts that you might have acquired over the years.
Credit cards are supposed to help you in order to build your credit score. But you might have noticed a friend or family member that was put under through the use of a credit card and you may not wish to follow in their footsteps. With this in mind, I have put together a list with a few tips to increase your credit score without the use of a credit card.
Building Credit, No Card Required
You may build your credit score through the use of loans. Although these loans may be limited they are still options to consider if you do not wish to open up a credit card account.
Take out a student loan.
Being a student you may wish to build some sort of credit without the risks owning a credit card will bring. Being able to be elected for a student loan does not rely on your credit score. If you decide to take on a student loan make sure you know how to pay it back properly and have the budget to afford it.
Apply for an installment loan.
An installment loan is sometimes allowed by retailers to purchase a product and pay for it in installment. You are expected to pay over a long period of time in these loans which is a great benefit if you are tight on cash.
Apply for a loan from a credit union
In order for you to be able to apply for this loan you must first become a member. These unions have the same benefits as a bank would have. But, rather than it being governed by a board of directors, it is managed by appointed members. Credit Unions have a certain amount of requirements you must meet in order to become a member, but once a member you can opt for a small loan and work on paying that off in order to increase your credit score.
Peer to peer loans
Also referred to as social lending, these loans operate online and connect you with private individuals who are willing to lend money for the right purposes. There are no banks or financial institutions involved in these loans. Without the need of a financial institution they are not as compelled to ask for higher interest rates from you. This is a great way to increase your credit score if you are on a budget.
Have companies file on your credit report
If you are renting a house or apartment, paying utilities or even phone bills every month you can request for them to file on your credit report. However, they are not obligated to do so and it would be more of a favor for them, but it doesn’t hurt ask right? This could be a great way to increase your credit score because you have to submit these payments monthly anyways. Just remember if you request this service any missed payments will make negative strikes on your credit score.
If you are considering the use of a card to increase your credit score
If you do not wish to use the former tips in order to boost your credit report that’s all okay, you can still achieve the same benefits from a credit card you just have to be careful not to bury yourself in debt like many people do. Stay on top of your monthly payments and try to have the money you are planning to spend on the credit card set aside in order to pay the amount off in full every month. This will greatly increase your credit score.
Keep a good attitude on how you use it.
Stay ambitious like I said before, striving to make full monthly payments every month and never spend more than you can afford. Setting a list of items you use your credit card for is a great way to keep spending on track. Use it for something you would be paying for anyways, such as, gas or groceries.
Credit cards can be harmless if you know how to use them. In using your credit card strategically you could still end up with a bank balance of zero dollars. Remember it’s not the debt that will result in having a bad score, it is how you pay it off.
In using these tips to increase your credit score you will be on your way to a great credit report in no time. Just remember not to spend more than you have.