Three Ways to Raise Your Credit Score with No Credit Card
Getting a credit card is the primary way for people to build a credit history and work towards achieving good credit. As many aren’t aware of, however, it isn’t the only way you can build it. Whether you aren’t qualified to own a credit card or you aren’t comfortable with how to use one, there are other ways to build credit without even owning a credit card.
If you are looking to raise your credit, but don’t want it involving your credit card, here are three ways you can do so, courtesy of your credit restoration company.
Be an Authorized User on Another Person’s Card
There are three common scenarios in which you cannot obtain a credit card: If you only qualify for high-interest cards, if you don’t qualify for the CARD Act of 2009, or if you are too young to use a line of credit by yourself. However, you can become an authorized user of another person’s card, such as a spouse or parent. If that happens, the account history will appear in your credit report. If the original card owner has a good payment history, it will also reflect any other authorized card owners without even using the card to purchase anything themselves.
If you have the right to use the card, but you don’t feel you will handle it in a responsible way, you can get the card holder to restrict your access to it.
Pay Your Bills in A Timely Fashion
Credit scores can be improved so long as you have bills to pay on a monthly basis. This includes rent or mortgage, phone bills, student loans, and utilities. Paying all these expenses before the deadline works towards helping your credit score. Considering that 30 to 40 percent of your credit score is made up of payment history, this can improve your credit score more than you anticipate.
One thing to keep in mind, however, is that the only payments reported to your credit agency are late payments that you do not send in on time. This can be a hard pill to swallow when you are penalized for being late, but never rewarded for being on time. In order to build positive credit, you will need to speak with your landlords and borrowers to ask about reporting your payment history to your credit agency.
Take Out A Credit-Builder Loan
A credit-builder loan is a type of loan for people to pay when they want to build credit or repair sunken credit. There are many banks, credit bureaus, or credit restoration companies that offer credit-builder loans. Mainstream banks on the other hand tend to not offer these.
Unlike a traditional loan, the amount of money you borrow goes into a COD account once you pay the starting fee. Over a span of a year, you make payments every month including a 10 to 15 percent interest fee.
It is typically hard to borrow money with a low credit score, around 600 or lower, but considering that the point to a credit-builder loan is to build your credit, there are no restrictions to this loan that you have to worry about. There is no single outcome to expect with a credit-builder loan, but individuals who pay this loan in a matter of a year will tend to improve their credit score by up to a good hundred points.