Don’t go into Debt to Improve your Credit Scrore

It is a sad indictment of society that it has allowed so much power to fall into the hands of the credit reporting business. Youngsters making their first financial transactions should be advised to save rather than borrow, but the message they hear is that having a good credit score is necessary to ease their way through life. Indeed the credit scoring industry has grown to have such an over weighted influence that a person who chooses to be prudent, and not borrow or use credit, can find themselves disadvantaged with a job application.

The convincing argument as to why credit scores do matter is that at some point many people are going to consider purchasing a home. In order to obtain a mortgage with preferential interest rates a good credit score is a must. It is possible to gain a credit score through the Fico expansion scheme without utilizing credit, but the service isn’t free if you want to record previous on time payments. The most viable way to obtain and improve your credit score remains using credit. However there is absolutely no need at all to go into debt to do so.

The simplest way to improve your credit score is to establish a line of credit which will begin to reflect your credit history. There is no need to obtain loans where interest is charged or borrow money. Instead it is a simple matter of obtaining a credit card and using it judiciously by making monthly purchases on it and clearing off the balance in full by automated debit. The interest rate doesn’t matter as the smart consumer will never pay interest on a credit card, but will only spend an amount on a credit card which they have the means to pay off in full at the end of the month.

It can appear as folly to use plastic to make a purchase without any benefit apart from an improved credit score, but as ones credit improves it can be made worthwhile by obtaining cash back cards and using them for all monthly purchases to obtain the maximum pay back. In addition there is a range of cards which offer statement credits which are worth having.

Those seeking student loans will benefit from establishing a credit history as they will be reliant on co-signers until their own credit is established. By handling their student loan payments responsibly there is an increased chance of a co-signer being released from their responsibility earlier.

Taking on debt is a choice and it is not necessary to take on debt to improve ones credit. Instead use credit to your own advantage by establishing an excellent credit score which will stand you in good stead in the job market and when it comes to taking on a mortgage. Most other uses of credit are just an invitation into debt which should be avoided at all costs. There is no need to obsess over your credit score but check it out annually just to be certain that it’s in top notch order.