How Can You Boost Your Credit Score Without A Credit Card?
Everyone out there knows the importance of a great credit score. If you decide to avail a house, an auto loan, or mortgage or need to rent a house or an apartment, a credit score is that number which will dictate your eligibility, and that’s the reason why you badly want your credit to be completely up to the mark and as strong as it can be. A good and effective way to have an impressive credit score is availing a credit card.
Does A Credit Card Help In Boosting Credit Score?
How does a credit card help you get a good credit score? If you pay your credit back on time every single month, your payment records and history will get a boost. This is definitely the most significant as well as the most critical factor that will ultimately regulate and govern your credit score. If you have a credit card, your credit utilization ratio can be controlled, and this is probably the second most major component of your credit score. But having known the pros, you need to be aware of the cons, too. Credit cards can surely play an important role in determining and accentuating your credit score, but the chances of incurring unrestricted spending can spell doom. As per records of 2016, an average American family has incurred a debt of $16,000 on credit card alone. That’s alarming, isn’t it? If you don’t have complete faith in yourself to handle your credit card responsibly, it’s better if you don’t avail one. But, don’t be worried. You can build up a nice credit score without a credit card. How’s that? Read on!
Try To Pay All Your Bills Well Within Time
Several bills reach your doorstep each and every month – bills regarding your student loan, your cable, your phone, electricity, and others You already know that you will accentuate your credit score if you pay your credit back on time, right? You can do the same thing here, too. Pay your bills on time, get the same results, and boost your credit score. Jot down all the expenses that you need to pay and set a calendar reminder for yourself to pay them off well within the due date.
Ensure That You Pay Your Rent On Time
If you are paying for your house or apartment rental in time, why don’t you let this habit do a bit of favor for you? You will get access to various rent-reporting services that will help you have your record of timely rent payments appended to your credit history. Remember, a continuous pattern of regular and timely payment of your bills will make sure of how strong a credit score you have achieved. You don’t need a credit card for that. If you are a responsible person, know how to handle your finances, and are quite sure that a credit card can’t tempt you into flippant expenditures, you can definitely get hold of one, as it can help you build a nice credit. But, you must keep a track of all your expenses and stay away from incurring a debt that you might not be able to pay within the stipulated time. Working on your credit score a lot harder without a credit card is by far a better option than to drown yourself in debts, destroying your financial prospects.
Try To Avail A Credit-Builder Loan
You can avail these loans from community banks or a few credit unions. The advantage of a credit-builder is that you can avail it regardless of a sub-par credit score. The amount that you take as a loan is kept in a bank account, and as you start making your payments, the lender gets the assurance that they will get their money back. Afterwards, if you’re making timely payments, the entire record gets detailed in the credit bureaus which, in turn, will give your score the most important boost that you require.
So, make sure that you can handle your credit card, keep a check on any uncontrolled expenses, and pay all your debts well within the given time. If you can’t, the debts incurred will snowball into a massive one as time goes by. Your credit score will be harmed, too. So, think before you leap. Work hard.
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