Credit scores are my favorite topic because there are so many questions revolving around the subject. Although your credit score is the most important 3 digit number you will come across in your life, chances are, if you are like the vast majority of Americans, you don’t know much about it!
With that said, if you search for articles about ways to improve your credit score, you will always get tons of articles that tell you to get a secured credit card and get your finances together. One question all of these articles are leaving unanswered is a pretty important one…
Is It Possible To Improve Your Credit Score Without A Credit Card?
The answer to this question really depends on who is asking it but, for most, the answer is yes! If you’ve got past due loans, paying them off will improve your credit. If you buy a car on credit, on-time payments will help both with the auto loan and insurance.
The only time you would absolutely need a credit card to see an improvement in your credit score is if you’ve done everything else right. Your insurance payments have all been on time or in advance, you’ve paid off a car and are on your second loan and you’ve taken all steps to pay off old debts.
However, that doesn’t mean that secured credit cards aren’t the best way to go either. The truth is, there is no faster way to improve your credit than with a secured credit card and a good financial plan.
Why Is A Secured Credit Card So Important For Building Credit Scores?
Your credit score is a number that is compiled using mathematical equations based on your history with fixed and revolving debts. With that said, if you have no revolving debts, it’s impossible to have a great credit score! This system is built on the same concept of the United States economy, there must be consumer debt to be financially stable.
So, If you have a secured credit card, you provide the credit reporting agencies with the data they need to say that you have good credit. “But, why secured credit cards and not some other loan?”, you ask. It will be almost impossible to get approved for any other revolving loan without at least fair credit scores. Also, knowing that secured credit cards are being used to improve credit scores, most providers of these accounts make it a point to report to all 3 credit reporting agencies every month.
Will Having A Secured Credit Card Alone Give Me Great Credit Scores?
NO!!! Secured credit cards will give you a boost as you do everything else right to improve your credit scores. For instance, if you have $10,000.00 in past due debts, secured credit cards won’t do much for you until you pay down your past due debts. Also, having a secured credit card won’t do anything for you. Without using the card, you will not be working with a revolving balance, you will be working with an open credit line that you never touch. Therefore, it’s important to use your card reasonably as you attempt to improve your credit score.
What Is The First Thing I Should Do If I Want To Improve My Credit Score?
If you really want to get working on improving your credit score, just knowing your score won’t do much for you. You will have to know why you have the score that you have. With that said, the first thing you want to do when you want to improve your credit scores is get a copy of your credit report and see if anything needs to be paid off or disputed. You can get a free copy of your credit report annually without signing up for a membership at www.AnnualCreditReport.com.
About The Author – Joshua Rodriguez