3 Ways to Improve Your Credit Score Without The Credit Bureaus

Three Ways to Improve Your Credit Score Without Contacting The Credit Bureaus

You know that a higher credit score will open all kinds of doors for you. You be eligible for lower interest rates on loans, maybe qualify for a home mortgage, and even pay lower insurance premiums. And you know that three companies compile the reports on which your credit score is based. But can you raise your credit score without contacting the three credit bureaus? The answer is yes, and we will tell you how in this article.

The answer to improving your credit rating lies in raising your high credit limit and lowering your debt to credit ratio. When you open an account with a lender or credit card company, they set a credit limit for you. But if you have a low credit score, good luck in getting a standard (unsecured) credit card. There are other options, some good some bad. Let's take a quick look at three of them.

Sub-prime Credit Cards. This type of credit card offers only a small amount of credit, sometimes only $300. Yet they may charge very high fees. You might get hit with an application fee, an account set-up fee, a monthly "participation" fee, and then an annual fee. After you add up all the fees, and you won't have much credit left. Stay away from the sub-prime credit card; if you're not careful they can actually hurt your rating.

Secured Credit Cards. There is another type of card that families with low credit scores can obtain - the secured credit card. These typically require a cash deposit. For example, if you put $500 in your secured account, then you can go out and charge $500 worth of goods and services. So why not just spend the cash? Because using the secured credit card will raise your credit limit. But be sure to comparison shop - some secured credit cards have high fees.

Sub-prime Merchandise Cards. An easier way to increase your line of credit without getting into a financial bind is to get a sub-prime merchandise card. These allow you to buy merchandise from a specific store (usually the company that sold you the card - often an online retailer). You are required to put down a deposit on whatever you purchase, and then the balance is financed on the merchandise card. The advantage of the merchandise card is that this new credit line is reported to the major credit bureaus. For example, if you get a $5,000 sub-prime merchandise card, and you finance a $500 purchase, your high credit limit will be increased by $5,000, and the small outstanding balance will help lower your debt-to-credit ratio.

Of course, a sub-prime merchandise card is not like a VISA or MasterCard. You can't go to any gas station or food store and expect them to accept it. And before you select a card, make sure that the provider does report to the credit bureaus, otherwise the card will not meet your objective.

There are ways to increase your credit score without contacting the credit bureaus. Carefully consider your options, and then move forward. There is never a better time than right now to start improving your credit.