Building A Credit Score Without Using Plastic
By Jessica Williams
Many consumers find themselves with a damaged credit score after accumulating a pile of debt on their plastic, which leads them to shy away from these credit cards after they have been paid off. Fortunately, there are numerous ways people can build their credit rating without using their credit cards, such as:
No. 1 – Report paid rent
In the past, credit bureaus did not put on-time rent payments on reports, but both Experian and TransUnion have started to do so, which is why people living in apartments should send in this information. To do so, renters will have to use a third-party service such as RentalKharma or WilliamPaid, which doesn’t require any approval from landlords. When a consumer sees their credit score fall, whatever positive information they can have on their report can help, so it would be wise to report this data.
No. 2 – Fix errors on a credit report
According to LearnVest, about one-in-four consumers have an error on this document so it would be wise to get a copy and make sure everything is accurate. There may be outdated personal information, fraudulent accounts, and incorrect account details that could be damaging to the credit rating. If any mistakes are located, people should report them to the credit bureau so they can be fixed.
No. 3 – Get a secured credit card
Unlike with normal credit cards that come with the risk of debt, secured credit card options require a security deposit to be provided to give consumers their credit line. However, that doesn’t mean it should be used any differently than its normal unsecured credit card counterpart. People will still need to make on-time payments, and keep their utilization ratio low to ensure that positive information is reported to credit bureaus. No matter how low a person’s credit score is they can usually qualify for this option, so it is a really good way to rebuild a damaged credit rating.
No. 4 – Obtain a credit builder loan
Consumers looking for an outside the box idea may be inclined to secure a credit builder loan to rebuild their score. These are usually obtained through a credit union in relatively small amounts. The funds are kept in an interest-bearing account, and consumers make monthly payments into the account until their term has ended. At the completion, they are entitled to the funds as well as any interest that was accrued.
Jessica Williams is Consolidated Credit’s Marketing Communications New Media Coordinator. As a member of the education team, Jessica focuses on helping consumers make better financial decisions while living debt-free. She has previously worked with Take Stock In Children, where she was a mentor and communications specialist, and SouthPromo.com, where she managed community relations, event planning, marketing, and public relations. Jessica attended both the University of Florida and the University of Central Florida where she received her B.S. in Interpersonal/Organizational Communications and Marketing. Connect with Jessica on Google+