Answering some FAQs about Black Junction
3 Ways To Build Credit Without A Credit Card
So how do you build your credit score without a credit card, that’s what I'm going to break down in this video.
1. Credit Builder Loan: ( Self, Credit Unions, banks offer this)
- Basically, once they accept you for usually $300 to $2500 bucks
- They will move the loan money over to a savings or cd that you can't really have access to
- As you it off, they will basically report the payments, and ones you are done they will return the money to you.
Here is why this important:
- Payment History: 35% ( you want to be 100% on this, and if you ever miss a payment call in and ask for it to be waived and put the account on auto pay)
- How you owe aka Credit utilization: 30% (keep it below 10%)
- Length of History: 15% ( the earlier you start the better)
- Credit Mix 10%: having a mix of different account like credit cards, car loans, and student loans and so on
- New Credit 10%: New account you open
- Doing one of these Credit Builder loans is going to focus on building up your history, which then can help you qualify for a credit card. Which will make it 10x more easier to build credit.
- Usually comes with some fees
- And you’ll also be paying interest
2. Secured card ( self now offer secured credit card also based on the money you have in your credit builder loan account)
- Now I made a video yesterday with a full description of all the credit cards
- But I will give you a summary here
- Apply for the Capital One Secured Card ( if you are trying to build credit but don’t have any and don’t have bad credit either) – if you get rejected call the company and say I have a job, and can put down a larger deposit if that helps
- If you get accepted for the capital one Secured Card: then apply for the discover secured card next ( but if you got rejected for the capital one secured card, you’ll most likely get rejected by discovering also)
- If they both said no, even after you called ( you most likely have bad credit and are not new to credit, so apply for the OpenSky credit card, or the self lender loan)
- Set the card on auto-pay
- Have your monthly bills charge the card automatically also
- Just forget about the secured card ( by the end of the year or in 3-6 months you’ll see a massive difference.
- This way you never have to pay any fees if you are new to credit
- And you also don’t have to pay any interest
3. Lending Circles
- Now missionassetfund is a very popular one I heard about
Her is how it works:
- You join a group with 10 people or more
- And you agree on how much money you'll have to pay every month (let's say $100 bucks for 10 months
- Every month one person in the group gets 1000 bucks and continues to pay $100
- By the end of the 10 months, everyone has borrowed 1000 and has paid back 1000. ( this helps with building credit very fast)
- A lot of these groups do require meetings
- This way you know the people who are working with you
- And you are less likely to default on the loan.
Now I promised you guys 3 others way to do it:
- Student loans: having student loan debt actually helped me build my credit score, but please do not get into debt to build a credit score to borrow more money. ( it’s a rat race)
- Personal Loans: Does the exact same thing as a credit-builder account
- Car loans: please do not buy a car you can't afford to build credit, the point is to get better rates, not spend a more.
Why Build Credit – To get better rates when you borrow money
Credit Score: is not an indication of you being good with money, it's just an indication of your history with borrowed money.
- So the goal is: to not pay interest
- Get a good Credit score
- And get some points and free vacations while you’re at it
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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I'm an Accountant but I'm not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.