Do You Need Debt to Build Credit?

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Debt is necessary in building credit, but it doesn't have to be credit card debt. Find out how to build credit by making timely payments on a car with help from the owner of a debt negotiation company in this free video on debt and money management.

Part of the Video Series: Debt Consolidation & Management
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Video Transcript

Hi, my name is Peter Repak. I'm the owner of Clear Financial, LLC. We're debt negotiation company and I'm going to talk to you about, "Do you need to be in debt to build credit"? The answer is, sorry to say, yes. Here's the reason why. In order to establish a credit history, you must acquire some debt from somewhere in some way sheet work form. It does not necessarily have to be a credit card debt. It could be that you actually purchased a car at your local car dealership, or you do something a sort of like that. You also can, some card companies actually offer you a credit card that is a secured credit card. You put a certain amount of money into a bank, onto a CD account and what you do is you build credit off of that. They give you a credit card, they're secured; they know if you're not paying it back, then you are going to be able to justify them that. Now what you also have to know is you don't really want to have that. You don't want to have credit card that whatsoever. However, we're living in a society where you're required to acquire some debt in order to establish a credit history. So later on in your life, you're able to purchase a home or something that whatever you need. But please understand, do not use money that you don't have. Make sure whatever, whenever you take credit, you can pay it back for sure. Again, this is Peter Repak; the owner of Clear Financial, LLC. We're debt negotiation company. Thank you very much for watching.


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