Ways to Build Your Credit Score Without Credit Cards [Personal ...

We?ve discussed some ways to build credit without a credit card in the past, but the folks at Get Rich Slowly have a few additional suggestions, including taking out a small personal loan with a trusted bank or credit union and paying it down on time, and trying out a secured credit card that you load up with money and use like cash. Both options will build up your FICO score over time, and are great alternatives for people who don?t like or don?t trust credit cards.

Get Rich Slowly walks through exactly what makes up your FICO score, and points out that while credit cards are just tools that?with discipline and good money management?can enhance your financial life instead of destroy it, some people understandably don?t trust credit card issuers, or won?t trust themselves with a credit card.

For those people, it?s important to understand the differences between good and bad debt. A small personal loan for a pet project or a used car from a bank or credit union you have a long history with counts as ?good debt,? and as long as it?s easily added to your budget and paid on time, can do a lot to boost your score. There?s also the secured card option, which requires you to put down as much money as you?re willing to use it for, and as you spend your collateral, you use up the card until you ?charge it up? again, as it were.

As a last resort, they?like we did?suggest biting the bullet and getting a card anyway, but they also pay a nod to the cash-only movement, or the people who dismiss FICO entirely because they manage their finances so even high-dollar purchases like homes and vehicles that traditionally require loans are payable with cash. What do you think? Are you a cash-only believer, or do you believe it?s not the cards that put people in debt, but the people themselves? Share your thoughts in the comments.

Building Your Credit Score: Are Credit Cards Your Best Option? | Get Rich Slowly

Photo by nasirkhan (Shutterstock).

Article source: http://feeds.gawker.com/~r/lifehacker/full/~3/xiq58-uYvoc/ways-to-build-your-credit-score-without-credit-cards

Source: http://tylor.co/2012/03/ways-to-build-your-credit-score-without-credit-cards-personal-finance/?utm_source=rss&utm_medium=rss&utm_campaign=ways-to-build-your-credit-score-without-credit-cards-personal-finance

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