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How To Improve Your Credit Score Without A Credit Card

Updated on June 14, 2013

Credit scores are one of those mysterious but all important numbers assigned to every person with a government ID. The actual mathematical process used to come up with your personal number is not disclosed to the general public. We do however, know some of the factors that are taken into account by the credit score programs.

If you are having trouble obtaining a credit card because of your credit score then there are a few things you can do.

Steps you can take to better your credit score

  1. Obtain a copy of your credit report and review it carefully for errors. If you find anything that is not right then take the necessary steps to correct them. A bunch of small errors could result in much bigger negatives when determining your credit score.
  2. Stop applying for credit cards and loans. When you make several applications in a short time period it may portray a certain amount of financial difficulties on your part and therefore make you seem more of a risk than you may be.
  3. Approach your bank about a credit card. Your bank has access to your personal, financial information and may consider you less of a risk than someone just looking at your credit score.
  4. You may be able to improve your credit score by demonstrating permanence. Obtain full time employment, purchase a home (or rent in your name), make sure you are on the voters list, get married, sign up for home utilities in your name - and put the deposit down.
  5. Pay you bills on time - every time. Your payment history factors into your credit score so make sure you pay in full and on time.
  6. Try to carry less than half the debt you've been approved for. For example, if you have a credit card with a limit if $5000 try not to carry a balance of more than $2000 before paying it off.
  7. Avoid multiple credit score checks by lending institutes, department stores (for their line of credit) or credit card companies. It tends to show desperation on your part.
  8. The older your accounts are the better. Length of credit history is directly related to how old your financial accounts are. If you need to open a new account then do it but keep the older accounts active as well.
  9. The variety of credit accounts you hold. A good credit mix (like a car loan plus a bank loan plus a mortgage) demonstrates you have the ability and experience to handle a variety of debt.
  10. Obviously, foreclosure, bankruptcy and defaulting on loans are very bad for your credit score. It is even worse if the courts get involved. Take steps to avoid this. See a debt counselor or even your bank for options - before your credit score is damaged.
  11. Carry some debt. While having to much debt can be bad for your credit score, having no debt can be just as bad. If you carry no debt you have no debt history to be considered when determining your credit score. It can also demonstrate a lack of debt experience - whether accurate or not.

Improving your credit score can be very difficult especially if you've never had a credit card or personal loan.

You may need to dig a little deeper and find a credit card company that specializes in 'first time' card holders until your credit score improves. Your bank may also have some services available that will help you build a credit history.

As a last resort (or perhaps first) you could have a relative or friend co-sign a loan for you. This may put a strain on your relationship with the co-signer so consider this option carefully before approaching him/her and above all make certain you can pay the loan back.

The most important thing to remember about credit scores is that they are just a number. You need to make sure the information being used to find that number is accurate. Your data is collected from several different sources many of which are done manually. Mistakes do happen. Review your credit report at least once a year and make the corrections.

It takes time to improve a credit score but if you pay your bills on time, in full, every time you are on your way. Show that you are not a vagrant by being on the electoral list, having a full-time job and owning or renting your own place and you'll get their even faster.


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