Financial Plan

There are many ways to improve your credit score and some ways do not include using credit cards. If you feel strongly about not using credit cards then you have limited options in building a solid credit score. It is much easier to raise your score by using your cards but it is not impossible.

If you have credit cards but don’t want to pay interest, then use your cards and pay them on time and in full each month. This will save you from paying interest and will build your credit score each and every month. To build your credit quickly you need to use the two main types. Installment loans (mortgages, auto loans and any other debt that is paid in monthly installments) are the first type. The second type is revolving accounts made up of credit cards, gas cards and department store cards.

If you don’t have any cards then you might find it difficult to get a card in today’s economy. You can still start building your credit without using credit cards. Start by signing up with a credit union. Credit unions generally are much easier to get a loan from then a normal bank. Many unions will give you a secured loan fairly easily. A secured loan will help you build your credit. It is important to find out if the credit union reports to all three credit bureaus.

Once you have all of your accounts paid off you will stop building up your credit score. Having at least one open account will keep your score on the way upward. This is the advantage of having at least one credit card account and using it wisely. Paying an account in full and on time each month is extremely beneficial for your credit score and if you pay the account before the due date you will not be charged interest. Contact your credit card company to find out the particulars of your account.

If you don’t have or you can’t get a credit card try becoming an authorized user on someone else’s card. If they have good credit and you’re able to become an authorized user than that good credit will appear on your credit. You don’t even have to have the card or even charge anything on the account to get the benefit. But make sure to use good judgment when becoming an authorized user because if they have a problem making payments they will also reflect on your credit score. You might even offer to help make payments if they have a problem making a payment.

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