Credit Cards Are Not The Only Way To Build Credit
Everyone knows how important it is to establish and maintain a good credit rating. Unless a consumer has large amounts of disposable income available, he or she will need a good credit rating in order to purchase things like a car, a home, or other big-ticket items. One of the best ways to establish credit is to apply for a credit card. Having a credit card allows a consumer to make purchases and pay for those purchases over time in order to demonstrate an ability to make regular payments on time.
But having a credit card is far from the only way to build credit or to maintain a good credit score. One way to add points to your score is to ask creditors to report your account activity to the three major credit bureaus. Things like rent, a cell phone bill, and other monthly bills that you pay on time can work in your favor if those creditors are willing to report your consistency to the bureaus. Approximately 35% of a person’s credit score is determined by their payment history, so if you pay your rent and other utilities on time, this can help your score significantly.
Another way to boost your credit score is to open an account with a credit union and take out a personal loan for a small amount. This may require a higher than normal interest rate but it will allow you to make regular payments and help your credit score.
Services like PRBC (Payment Reporting Builds Credit) provide an alternative to the big three credit bureaus – TransUnion, Equifax, and Experian. Reporting your payment history to a service like this and creating a non-traditional credit score can be a great way to build better credit.
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