Credit Cards To Build Credit – How To Use Them To Improve Your Credit Rating
Two primary things are needed to develop good credit: time and payment history. With credit cards to build credit you can utilize loans and other available data like rental and utility payments, credit cards and any other credit-based information. However it is extremely important that your payment history isn t apparent to potential lenders. In reality credit score validation is almost impossible without showing proof of a solid payment history. So how can you go about getting credit cards to build credit?
There are a number of ways you can go about building credit cards to build credit. The first way is to use an existing account that has built up some payment history. This can be a home loan or car loan, or any type of account that is in good standing. Alternately you may also want to seek out alternative data such as rental and utility payments, credit card statements, etc. These are all excellent sources of payment history, which are easily verifiable.
Another option for building credit cards to build credit is seeking out a cosigner. A cosigner is someone who signs on the dotted line in order to help you build credit. If you have a low credit score then a cosigner may be the best alternative for you. However if you don’t have a cosigner then this is another option that is worth investigating further. Here we will explore the pros and cons of obtaining credit cards to build credit with a cosigner.
One advantage that a cosigner provides is that there is no risk to you personally. With a traditional secured card it is possible to lose money if you are not able to pay off the full balance each month. On the other hand with a cosigner you are not putting your personal credit at risk. In this case you will not be responsible for any delinquencies that a cosigner might incur. This is another option that is worth investigating further.
Another advantage associated with credit cards to build credit with is that they provide you with an alternative data set to base your decision on. If you want to go down the path of obtaining one of these cards then you are going to need to research the available options. In this regard obtaining a secured card or an unsecured card would be two of the better alternatives. Secured credit cards will require that you place something of value as collateral with the credit card company.
Another option that is worth exploring is finding a lender that will provide you with a credit card that does not require a deposit. In this case you would have to rely on your rental payments to help you establish a credit line. Aptly enough, when you make rental payments on these types of credit cards you are subject to the same interest rate as those with a deposit requirement. This can be an attractive alternative data set to consider.
If you have some alternative data to work with then you should take this information into consideration when you start to explore the different credit cards to build credit with. The information that you will need to determine which option is best for you includes your payment history, how much you owe in debt, and your level of income. You will also need to determine if you have any revolving credit cards that you pay off in full each month. If you do not have any revolving credit at all then you may want to look into a secured card or an unsecured card.
Credit cards to build credit can be used to improve your credit rating if used in the proper manner. It is not as difficult as many people make it seem. In fact there are no difficult steps involved. All you really need to do is look for alternative data and determine which one is best for your individual situation. By following this basic advice you will find that using credit cards to build credit is easier than you ever thought possible.