How You Can Improve Your Credit Without A Credit Card

credit card improvement

It’s so easy to laugh when someone states that their credit card put them into debt. It’s not the card that puts anyone into debt; it’s what you do with the card. The credit cards in your wallet are actually inanimate objects that cannot actually do anything without you. Without your actual hand to pick up the card, swipe it and make purchases with it that you cannot afford, the card is useless and absolutely not a threat to anyone in your household. It’s always just so funny to me to hear people say that they don’t carry credit cards since they put them into debt. It’s just not the truth.

However, credit cards can put you into debt if you are not responsible with them and you do not pay them off in full at the end of each billing cycle. Now you’re in debt, you’re behind on your payments and your credit is shot. You know you need good credit to get a good credit card, a loan, a mortgage or even a job in many instances. What do you do when your credit is shot and you don’t have a credit card to use responsibly and help you fix it? You improvise; you learn that you don’t need a credit card to repair your credit at all. You can thank me for this information now, but you don’t have to.

Face the Truth

You’re not going to fix your credit or rebuild it to a nice level if you don’t face the truth. The truth could be many things. You could have made a mistake. You could have been the victim of identity theft. You could have lost your job and been unable to find a new one far longer than you were able to continue paying your bills. There are so many reasons and ways that you and everyone else in the world might have gone into debt, but the truth remains the same. You have to face the truth.

  • You cannot spend what you don’t have
  • You cannot live above your means
  • You cannot make only minimum payments
  • You cannot apply for credit you cannot afford
  • You cannot skip payments
  • You have to be careful with your money

That’s the truth you have to face. You will never get out of debt and make any improvements in your financial life until you face these simple truths. Now that you know this, it’s time to learn how you can rebuild your credit with a credit card.

Always Pay On Time

It is pretty simple, pretty straightforward, and pretty much the simple truth. You don’t need a credit card to build your credit if you have bills in your name and you pay them on time. I mean, it’s really just that simple.

Don’t Cancel Old Cards

This is the biggest mistake so many people make with their credit; and it’s a bad one. Let’s say that you’ve had a credit history for 15 years. The first 10 years of your credit history, you always made your payments on time, you kept your card balances low and you had excellent credit. You lost your job and you were unable to pay your bills for a few years on time every single time. Now your credit is shot, but it’s only been like that for the past five years.

You might be tempted to dig into your wallet and get those old cards you had when you first gained your credit history 15 years ago and cancel them so you can lower your debt-to-income ratio and up that score. DO NOT DO THIS. Those old cards show a long credit history; and a much better one than the more recent cards. Keep them – you need them. A credit history with a card from 15 years ago with no late payments and a low balance for 10 years is far superior to a credit history with nothing but cards from the past 6 years all with late payments and missed payments.

Build An Emergency Fund

This is not anything that really affects your credit per say, but it does more so than you might think. When you have an emergency fund that is worth several months of work, you can worry a bit less about missing a payment or making late payments on any of your bills. It won’t help your credit in the least to have a nice savings account with an emergency fund in it, but it will help should anything happen in the meantime.

Check Your Credit Report

Listen, you know you messed up and it’s all your fault, but it’s not such a bad idea to take a look at your credit report. After all, most people’s reports do feature mistakes, and you can clean those up and potentially increase your score without doing much else. Perhaps you have a credit card that was written off after you stopped making payments on it 8 years ago. It’s your bad, but the credit bureau’s job is to wipe that card from your credit history after 7 years. If it’s still there, it’s still having a negative effect on your score. Call, dispute it and get it off that report.

Photo by Getty Images

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