How to Increase a Credit Score Without Credit Cards
Having a good credit score determines your ability to obtain credit. A good credit score also helps to obtain a good interest rate when applying for credit. Your credit history determines your credit score, and is detailed in your credit report. Often times, there are errors in your credit report which can negatively affect your credit score. You can increase your credit score without opening credit cards by obtaining and examining your credit report for inaccuracies.
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Instructions
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Obtain your credit report. U.S. citizens are allowed to obtain one free credit report from each of the three credit agencies (Equifax, Experian and TransUnion) once every 12 months (see Resources below).
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Check your Credit Report for errors. Inspect each listing closely for discrepancies. Are the accounts listed as open and closed accurate? Are the dates correct? Are balances correct? Are the credit limits correct? Are accounts that are paid in full marked as such? Is the personal information correct? Do all the listings relate to you?
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Dispute errors found. Report errors to the lender. Additionally, report errors to EACH of the three credit reporting agencies. Sending a letter to the agencies along with direct support from the creditor will be the most effective way to have the error removed. If you don't have hard copy support from the lender, just send a letter with the dispute to the credit reporting agency, which will then contact the creditor or lender.
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Ask a lender to remove a one-time late payment off of your credit report. If you have had 12 months of on-time payments, the lender may give you a one time "goodwill" adjustment and remove the late payment notice from your account. If the lender agrees, ask the lender to re-age your account to improve your rating.
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Tips & Warnings
Recheck that errors were resolved. It can take 30 to 90 days for errors to be resolved through the credit reporting agencies, so wait about 3 to 4 months and recheck your credit report to ensure that the errors you disputed have not reappeared.
Take out a loan. You can also increase your credit score without credit cards by taking out an installment loan and making payments on time. Make monthly payments on time to show payment history. Once the account is paid off, don't close it. Having open accounts with no negative comments improves your credit score.
Be sure to check your credit report at least once per year for errors.
Resources
- Photo Credit Image courtesy of StockXpert
