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How to Improve The Credit Without Credit Cards?

Either you must be very wealthy or you execute your planning to live frugally to survive without the need to apply for loans. Most of the people are in need of credit at some point or the other. Wise use of credit cards helps to build credit which is necessary to get approved for loans if needed. However, not everyone can get credit cards. While some are denied the cards, there are those who are hesitant to get credit cards for fear of getting into debts. Since it is necessary to have good credit while applying for loans for any of your financial requirements such as buying a home, a vehicle or for education, it becomes inevitable to learn the strategies of building credit even without using credit cards.

Options to improve the credit score after bankruptcy

A good credit report helps to get loans for reasonable interest rates. You can save on insurance premium. When you are on the lookout for any utility provider, it is your credit report that determines whether you are required to pay any security deposit. A good credit rating saves you hundreds of dollars every year. Since bank accounts are considered as the indications of financial stability, it is recommended that you create bank accounts. The financial dealings are being observed by the major credit bureaus, especially after bankruptcy. You can request the okay lending companies to report your prompt payments to the credit bureaus so that your ratings get improved.

The monthly payments towards the rent, water, power and cable utilities can be reported even though these companies are not obliged to report your financial activities. By becoming an authorized user of someone else’s credit card, you can avoid a card for you but boost the credit score. However, you need to be cautious while using this means to improve your credit score. The person who owns the card should have prompt payment records or else your score gets hurt. Fortunately, your credit accounts can be removed if you remove yourself as an authorized user.

Instead, a joint credit card can be opened which is not the same as using other’s card as an authorized user. Some of the people keep away from credit cards due to the fear of default. However, if you find it difficult to get approved for credit cards due to poor credit history, you can try to consider the alternative options. Secured cards can be obtained from banks by making a deposit. The card with a specified credit limit of the amount deposited can be obtained. This card functions as a prepaid card. It should be ensured that the banks or the credit unions that have issued the card report the transactions to the credit bureaus.

The fees are quite high. The interest rates are also higher. However, the option is considered by many people after the discharge of bankruptcy to rebuild the credit ratings. Charge cards which are similar to credit cards do not allow balances and you are required to settle the bill entirely every month although there is no limit to the amount you spend. Getting a loan is a good idea if you are confident of making prompt payments. The loans help to improve your credit score as long as they are yet to be settled. Whether it is the credit card loan or loan of any type, it should be ensured that the repayments are reported promptly.

Secured loans can be considered as the approval is faster than for unsecured loans. The interest rates are higher for the borrowers with poor credit. However, the rates are lower for the loans from credit unions than from banks. If you have difficulties in getting approval, you can seek the help of a cosigner with good credit to obtain the loan. Peer to peer loans can be alternative sources for poor credit borrowers. Although the interest rates are higher for short term unsecured loans, you can have the choice of interest rates with peer to peer lending unlike in payday loans which are very costly.

Peter Christopher

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