Improving Your Credit Score With No Credit Card
There are many people who struggle with their credit scores. If you have a poor credit score, you will know that it is hard for you to access of a lot of things in life, particularly in things such as loans or leases. Thankfully, you don’t have to let your credit score define you forever because it can be changed. There are many methods that you can do to build up your credit score.
However, you must keep in mind that all these methods require patience and effort. You have to be aware that your credit score may not change until a month to three months after you start putting in effort. Moreover, it may not be a drastic change that you were hoping for. However, if you are diligent and wait patiently, you should be able to have a fair and maybe even good credit score within a year or two. Here are some tips that you ought to try to learn how to build credit without a credit card.
- No Credit Card? No Problem. One of the most common ways to rebuild your credit is to get a new credit card to show major credit bureaus that you are making good payments on this new card. However, if you have a poor credit score then you might be aware that you may not qualify for most traditional credit cards. Thankfully, there are still other ways you can get around that. You can apply for a secured credit card to start making good payments on that card.
The good thing about a secured credit card is that you don’t need a lot to qualify for one, which is why people with poor credit tend to go for this option. The reason why it is so easy to access is because the credit card company will need you to link a personal savings account to the card. It will be considered as collateral in case you won’t be able to make any payments on time.
- Go to a Credit Repair Company. If you have been searching for ways to build your credit, you may have heard about credit repair services. These services are not meant to do all the work such as making sure you pay your bills on time. What they do is that they go to three major credit bureaus or agencies to pull out a credit report from each of them. They do this because they are going to spot the errors that may be on the reports.
Their job is to try and to find errors so they can remove them from your credit report. Companies may report to different bureaus or agencies, so there may be a mistake in some of your reports. Once they find the errors that may be damaging your credit score, they will then file a formal complaint, which is also known as a dispute, to the credit bureau. They will then present their case and explain to their best potential as to why it is an error and that it should be removed. In about a month’s time, it will then be decided as to whether the error should be taken out or not.
You need to remember that removing errors from your credit report may not make the biggest difference in your score, and any legitimate credit service repair company will tell you that. Scammers will trick you into thinking that it will change immediately and that you’ll have to pay them before they work, but real companies will give you the truth and will only ask for payments once the job is done. As stated earlier, once the errors are removed it may take a few months until you see your credit score improve. However, doing these services may be helpful in your effort to rebuilding your credit, so if you have a few errors in your report, it may be wise to get these services.
- Always on Time. One of the most common reasons you may have a low credit score is because you are paying things late. Payment history accounts for about a whopping 30% of your credit score, therefore you need to make a change right away if you want to get a better score. You should make it a point to meet your payments on time from now on and pay them in full. It won’t help improve your credit score right away, but it will definitely keep you from damaging your credit any further.
You need to make sure you make it a habit and realize that paying for your bills on time is a responsibility that you must adhere to. Payment history plays a huge part in the whole process of getting a higher credit score. You can try to do things such as set up alarms and reminders on your phone and calendar to remind you when you should pay for your bills. There are also many apps that you could get on your phone to remind you of how much your bills are and when they are due.
- Clear That Debt. Just like payment history, debt can affect a huge part of your credit score. While payment history is specifically at about 33% of your credit score, debt takes second place at 30% of your credit score. One of the first things that you are going to want to do is to clear out any credit card balances that you have. Remember, the lower the balances the better, but if you can’t clear them out right away, try to aim for at least below 30 to get a better credit score. Afterwards, you can slowly start paying it off once you cut out a large enough chunk of it.
You may want to pay for your debt as soon as you can. The interest rate can slowly take a toll on you and you don’t want to be overwhelmed in debt in the future. As much as possible, try to put a portion of your money aside each month and dedicate it to paying off any debt that you have. This is a good way to not only boost your credit score, but it will take a load off of your shoulders as well.
Improving your credit score doesn’t happen overnight, but with the right amount of dedication and effort, you will be able to do so. Just be patient and don’t constantly check on your credit reports. Instead just be financially more responsible and follow the =tips we mentioned above so you can have a good credit score to get all the things that you need.