There has always been the notion that credit scores have everything to do with credit card usage. However, your credit score isn’t as closely tied to those pieces of plastic as you might think.
In reality only a small portion of your credit score is based on having and using credit cards. Even people who do not want to use credit cards can build a respectable credit score.
There are several ways to build or improve a credit history without using credit cards. Among them are:
Secured Loans from Credit Unions
Borrowing from a credit union is made possible by:
This type of borrowing is backed by money you place in a credit union savings account. The interest rates for credit union loans are typically only a few percentage points above the rate you earn for keeping money in credit union savings accounts.
Credit union loans are typically easier to get than traditional bank loans, since credit unions are more likely to be looking for ways to say yes. Credit unions are often willing to look at more than just your credit score, and will consider questions like whether or not you are responsible with existing bank accounts and whether or not you appear to be actively saving money.
Partaking in fiscally responsible behaviors will help you earn the trust of your credit union, making it easier to take out a loan from them and improve your credit score as you pay that loan back.
Bank accounts do not factor into your credit score but the relationship you build with your bank may lead to financing opportunities. If you have existing accounts in good standing at a bank, you will be far more likely to be able to take out a loan when compared to someone who has the same credit score, but has never had any dealings with the same bank.
Pay On Time
Pay your bills on time. Payments that arrive late are marked “past due” 100% of the time, even if they are only late by an hour, so make sure that you pay each and every one of them on time. Your credit report won’t explain your exact financial situation to potential reviewers, banks or other entities that you’re trying to get financing from – all that it really tells them is whether or not you can be expected to make payments on time.
If you do run into financial difficulties, then you’d better be prepared to consult with your creditors and work out a payment plan before missing any payments, otherwise your credit score is likely to drop.
Become An Authorized User
When you’re added to someone’s credit card as an authorized user, his or her history with that card is typically imported to your credit report. If the person is in good standing with his or her creditors, that could enhance your own score.
However, if the other person runs into financial trouble, misses payments or defaults on loans, then it could spell big time trouble for you. Fortunately, it’s easier to pull yourself back from the brink when the problematic part is someone else’s responsibility, as you can remove the negative pieces from your own credit history simply by being removed from the account as an authorized user.
The other person doesn’t need to give you access to the card to add you as an authorized user, but you should make sure the credit card will export the information to your credit reports. Some issuers will only import authorized-user information for spouses and immediate family members.
Address The Issues Affecting Your Score
For some people, a low credit score might be caused by late payments, accounts in collection or high debt to income ratios, while for others, the culprit could be a reporting mistake.
Building your credit score will require addressing the specific issues causing concern for potential lenders. If you are unsure about which factors are causing your credit score to dip, then contact the reporting agency to speak with a customer service representative.
Studies suggest that up to 25% of credit reports can contain serious errors, such as outdated personal information, mistaken or fraudulent accounts, and incorrect account details. Fixing these errors can give your score an immediate bump.
Car Capital Financial
If you need to build your credit fast and live in Southern California, then think about getting a car title loan from Car Capital Financial. Title loans are issued based on your ability to repay the loan.
We are a trusted title loans company with over 15 years of experience, and we pride ourselves on delivering fast, reliable and affordable car title loans.
Call us at 1-888-500-9887 to get your cash loan today.