They say that money talks, but these days, it seems credit is more important than having plenty of cash at your disposal. Banks, lenders and many businesses are often more concerned with a good credit score than how much cash you currently have on hand.
You might think you need a credit card or two to build your credit score, but this isn’t true. You can build credit without using your credit card, or even possessing one.
1. Ask Utility Companies and Rental Offices to Report Your Payment Behavior
If you pay utility bills, cable bills or rent, you may already be on your way to building good credit. As long as your payments are always on time, you can ask the various companies to report your good payment behavior to one or all of the three major credit bureaus. These companies may not honor your request, but it can only help your credit score if they do.
2. Ask a Friend or Family Member to Make You an Authorized User
If a friend or family member has good credit, and he isn’t worried about you messing it up, he can make you an authorized user on his credit account. As long as his credit remains in good standing, your own credit score will steadily improve.
3. Take Out a Personal or Car Loan
Even if your credit score isn’t that great, you may still qualify for a personal loan or car loan. Getting either one and making payments on time will help your credit score improve over time. You can also use the personal loan to pay off credit card bills, which will affect your credit score positively.
4. Credit Repair Actions and Services
Paying off credit cards is one form of credit repair that can help a bad credit score make a rebound, but other forms of credit repair may also work to improve your score.
The most basic and important thing you can do is check your credit reports for errors and request they be fixed. It’s a good idea to check all three credit reports because, while one may be clear of errors, another might not be.
You can also look into a credit repair service, which will examine your credit and advise you on the best things you can do to repair and build your credit quickly. Just be sure to choose a reputable credit repair service; do your research before choosing any service.