10 Ways to Build Credit Without a Credit Card

A woman in a bright red shirt smiles and looks at her cellphone while making notes in her notebook about building credit without a credit card

Credit cards are a great tool for building credit. They’re easy to use, offer flexibility, and sometimes even reward you for using them. Most also directly impact your credit score and are used by many people to begin building their credit profile.

But what if you don’t want a credit card or are having trouble qualifying one? Don’t worry. There are other plenty of other ways to build a strong credit history. Here are ten options for building credit without a credit card.

1. ExtraCredit

The easiest way to start building your credit without getting a credit card is to sign up for ExtraCredit and add your rent and utility payments to your credit profile. With ExtraCredit, you can use the service to add bills not typically reported to the bureaus and get credit for bills you’re already paying. We help strengthen your credit profile by adding your rent and utility payments as tradelines to your credit reports with all three credit bureaus. Continue paying those bills on time, and rent reporting can help you add more to your credit history and help you work your way up to a good credit profile.

Build Credit with ExtraCredit

2. Authorized User Status

Authorized user status is a great way to begin building credit—as long as you and the primary cardholder are on the same page. As an authorized user, you can use the primary cardholder’s credit card and piggyback off their credit card activity. Even if you never use the card, card activity can still be used to positively impact your credit. You’ll want to verify with the credit card company that they report card activity for authorized users. Otherwise, you’ll be wasting your time.

This method comes with some risks, though. Your credit report will reflect how the card is used, even if you’re not the one using it. If you or the primary cardholder racks up an excessive balance or misses payments, that activity could end up damaging your credit instead of helping it. Only become an authorized user if you are both committed to practicing smart credit-building habits.

3. Credit Builder Loans

Credit builder loans aren’t widely publicized, but they are a great way to build credit without a credit card. Smaller institutions like credit unions are generally more likely to offer credit builder loans specifically to help borrowers build credit.

Typically, you borrow a small amount, which is put into a CD or savings account and held until the loan is paid off. You make payments for a set amount of time until the loan is paid. At that time, you can access the funds, including any interest earned from the savings account. And if you’ve made all your payments on time, you’ve been successfully building your credit all along.

These loans often have low interest rates and are accessible to those with poor or nonexistent credit. That’s because you provide all of the collateral for the loan in cash, so it’s not a risk for the lender. Credit builder loans aren’t great if you need the money now—since you need to pay off the loan before you can actually access the funds—but if you have time to build up your credit, they’re a great place to start.

4. Passbook or CD Loans

Similar to credit-builder loans, passbook or CD loans are offered by some banks to existing customers using the balance you already have in a CD or savings account. You build credit as you pay down the loan, and you can access your balance once the loan is paid off. These are very similar to credit building loans, but they use funds you already had in savings as collateral. Interest rates are typically much lower than credit cards or unsecured personal loans as well. Make sure your bank will report payments to the three major credit bureaus before opening this type of loan.

5. Peer-to-Peer Loans

Peer-to-peer loans are made by an individual investor or groups of investors instead of traditional financial institutions, with the accrued interest going back to the investors. While they may sound sketchy, P2P loans are completely legitimate and can be set up through a reputable P2P service like LendingClub—unlike borrowing money from your cousin.

P2P loans will typically accept borrowers with lower credit scores than traditional lenders, but their credit requirements and interest rates will vary depending on the lender—and their rates and fees may be higher than other personal loans. Before you take out this type of loan, ask whether the service reports your timely payments to the credit bureaus so you can get a positive impact on your score.

6. Federal Student Loans

If you’re a student looking to build credit, you may consider a federal student loan. Most federal student loans don’t require any credit history. Private options, on the other hand, often require good credit scores or a cosigner. Don’t take on student debt just to build your credit, but if you’re already considering a student loan, they could be a good way to get started. Federal student loans show up on your credit report, and if they’re paid on time, they can help you build a positive payment history.

7. Personal Loans

Some lenders offer unsecured personal loans to individuals with no or bad credit. These involve borrowing a fixed amount of money and making fixed payments every month. If you don’t have an established credit history, you will likely be charged a higher interest rate. You may be able to get a co-signer to help your odds of approval for lower rates.

Don’t bother with payday loans. These will not help you establish credit history and will just end up costing you money in the long run. Alternatives like OppLoans do report payment history to the credit bureaus, but their rates are typically higher than traditional personal loans.

Apply for a Personal Loan

8. Auto Loans

Most traditional auto loan dealers report all your payments to the credit bureaus. And since auto loans are secured by the vehicle, they’re less risk for the lender than unsecured loans. That means you might be able to qualify for them even if your credit isn’t stellar—though that might come with the expense of higher interest. If you make your loan payments on time, you might be able to positively impact your score and refinance later, though.

9. Mortgages

Getting a mortgage with no credit history is difficult but not impossible. If your goal is just to start building credit, a mortgage may not be the best place to start. But if you’re ready for home ownership and the possibility of building your credit with a mortgage, you have options. First-time homebuyers may consider FHA mortgage, for example, which is available to individuals with a thin credit file. Smaller lenders like credit unions tend to be more flexible and may help you qualify for a mortgage as well.

Your credit score might take a hit when you first assume a huge debt, but it will rise over time with regular monthly payments. Concentrate on making those payments on time to continue building your credit.

10. Rent

Most credit reports do not contain entries regarding your rent payments simply because landlords don’t bother reporting that activity. But credit bureaus will incorporate timely rent payments into your credit report if that information is submitted to them. If you’re evaluating a rental or you currently rent, ask the landlord if they will report your rent payments. You might also be able to use online rent payment applications to ensure this information is reported.

Want to get credit for your on-time rent payments? Sign up for ExtraCredit. Our unique Build It feature will submit rent and utility payments to the three credit bureaus on your behalf, so you can get credit for paying those bills on time. In fact, we’ll look for your past payments to make sure they are submitted so you get credit for previous rent and utility payments as well.

Keys to Building Credit

Whatever option you choose to build credit without a credit card, you must make payments on time consistently. Late payments deal severe damage to your credit score. Avoid financial obligations that put you at risk of making late payments or defaulting.

You also need to keep in mind your account mix. If you only have installment loans and no revolving credit such as credit cards, you won’t have an ideal account mix. Account mix makes up about 10% of your credit score.

Your credit utilization ratio—or the amount of credit you have tied up in debt—might also suffer if you have no credit card or other form of revolving credit. However, in most cases, no credit utilization is better than high credit utilization.

Ready for a Credit Card?

If you’re ready to try building your credit with a credit card, try a secured credit card. These cards are often available to people with bad or no credit, and they typically start with smaller credit limits that can help you learn responsible money management habits.

OpenSky® Secured Visa® Credit Card

Apply Now

on Capital Bank’s secure website

Card Details
Intro Apr:
N/A


Ongoing Apr:
17.39% (variable)


Balance Transfer:
N/A


Annual Fee:
$35


Credit Needed:
Fair-Poor-Bad-No Credit

Snapshot of Card Features
  • No credit check necessary to apply. OpenSky believes in giving an opportunity to everyone.
  • The refundable* deposit you provide becomes your credit line limit on your Visa card. Choose it yourself, from as low as $200.
  • Build credit quickly. OpenSky reports to all 3 major credit bureaus.
  • 99% of our customers who started without a credit score earned a credit score record with the credit bureaus in as little as 6 months.
  • We have a Facebook community of people just like you; there is a forum for shared experiences, and insights from others on our Facebook Fan page. (Search “OpenSky Card” in Facebook.)
  • OpenSky provides credit tips and a dedicated credit education page on our website to support you along the way.
  • *View our Cardholder Agreement located at the bottom of the application page for details of the card

Card Details +


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Source: credit.com

How Much Does a Cosigner Help with Getting Auto Loans or Better Loan Terms?

A woman in a bright yellow dress drives a silver car.

Imagine you’re shopping for a new car and finally find a reasonably priced set of wheels that you like. But when the dealer pulls your credit, that seemingly affordable monthly payment is no longer available to you. Instead, you’re offered a subprime car loan at 10% or even 20% interest because your credit isn’t strong enough to get a better rate.

How much does a cosigner help on auto loans when you’re facing this type of situation? Get more information below to help you decide whether seeking a cosigner is the right option for you.

How Does a Cosigner on a Loan Work?

A cosigner is basically someone who backs the loan. They sign agreeing that if you don’t make the payments as promised, they will step in to pay them.

If you don’t have much of a credit history or your credit is bad or poor, lenders are typically hesitant to give you an auto loan. They perceive you as risky. Will you pay as agreed? There’s not enough data or credit history for them to make that call.

However, a cosigner with a long history of good credit is different. The lender is more likely to believe that this person willpay as agreed. So, if you can get a cosigner to back you, you might have a better chance of getting a loan or getting better terms.

How Much Does a Cosigner Help With an Auto Loan?

How much can you save? Imagine you finance $37,851, the average price for a new light vehicle in the United States as of February 2020.

The average interest rate as of the end of 2019 for new car loans was 5.76%. If you’re able to get that interest rate and a loan term of 72 months—that’s 6 years—you would pay a total of $44,742. That’s $6,891 in interest and a monthly payment of around $621.

If you financed at 10% without a cosigner for the same terms, you’d pay a total of $50,488 for the vehicle. That’s $12,637 in interest and around $701 in monthly payments.

This is obviously just an example, but you can see that a cosigner can save you a lot. In this case, it’s $80 a month and more than $5,700 total.

Cosigner Versus Co-Applicant

It’s important to note that having a cosigner for a car loan is not the same thing as having a co-applicant. A co-applicant buys the vehicle with you. Their credit history and income are used alongside yours to determine if you, together, can afford the vehicle. The co-applicant also has an equal share of ownership in the vehicle purchased with the loan.

A cosigner, on the other hand, doesn’t have an ownership share in the vehicle. Their income may also not be a factor in the approval. Typically, they’re along only to provide a boost in the overall credit outlook.

What Are Some Downsides of Having a Cosigner?

Most of the risks or disadvantages are held by the cosigner. If you don’t pay the loan, they could become responsible for it. They could also suffer from a lower credit score if you’re late with car payments because it might get reported to their credit too.

As a borrower, you might experience a few disadvantages in using a cosigner. First, you have to get someone to agree to this, and you typically want it to be someone with good credit. Trusted family members are the most common cosigners, but that could mean that they might want to have a say in what type of vehicle you get.

And if something happens and you can’t pay the vehicle loan for any reason, you run a personal risk. You could damage your relationship with the cosigner if they do end up having to pay off the loan or face damage to their credit.

So, Should You Get a Cosigner for an Auto Loan?

The decision is personal. Before you do anything, check your credit and understand where you are financially. That helps you know what your chances for getting approved for a loan are on your own and how much loan you might be able to afford.

Then, check out some potential auto loans and consider whether you should apply for them on your own. If you know your credit is too poor or you try to apply for a loan and don’t get favorable terms, talk to a potential cosigner. Be honest about your situation and have a plan to pay the loan on time each month so they feel more confident supporting you as you make this purchase.

The post How Much Does a Cosigner Help with Getting Auto Loans or Better Loan Terms? appeared first on Credit.com.

Source: credit.com

NYC Noise Complaints Increase 279% in Just 4 Months

Even Americans who haven’t visited know that New York City never sleeps. Endless streams of people on the street and taxi cabs clogging the roadways are just part of the ceaseless movement in the city. With a population nearing nine million people, New York City always has something going on within its five boroughs.

With all the commotion, it’s safe to say that New York City could be one of the loudest cities on earth. However, it seems that New Yorkers are getting tired of the noise more than usual this year. From COVID-19 lockdowns to widespread protests, New York City has become quite chaotic lately — is this the cause of the increase in noise complaints?

Methodology

We analyzed data from NYC OpenData, which includes a database of 311 calls placed within the city. We looked at noise complaint calls placed from February 1, 2020, to June 30, 2020, and from February 1, 2019, to June 30, 2019.

We also used available population estimates from the U.S. Census Bureau to weigh noise complaint call data in relation to the population of each New York borough: The Bronx, Brooklyn, Manhattan, Queens and Staten Island.

Noise complaints rise 106% in one year

a line graph showing an increase in new york city noise complaints from 2019 to 2020

It’s no secret that New York City is a noisy place –– the bustling streets and never-ending traffic jams create quite the cacophony of sound. However, it seems like residents are complaining about noise more than ever, especially since last year. Total complaints more than doubled from this time last year, increasing by 106 percent. 

Here’s a breakdown of the data between 2019 and 2020: 

Month 2019 2020 % Change
February 26,839 27,781 3.51%
March 33,567 37,396 11.41%
April 39,059 39,373 0.80%
May 40,339 77,628 92.44%
June 58,845 105,240 78.84%

Noise complaints increased by over 106 percent from 2019 to 2020 (within the measured time period). The city also saw a 97 percent increase in complaints from the beginning of April to the end of May 2020, marking the largest jump in noise complaints so far this year. These increases paint a striking picture of the considerable changes in city life over the last several months.

COVID-19, lockdowns and protests in NYC

an illustration showing a 279% increase in total noise complaints in New York City from February to June 2020

The beginning of March marked the start of quarantines, lockdowns and panic over the COVID-19 pandemic. With such a huge population density (27,000 people per square mile), New York City quickly fell into chaos as the virus spread through the city –– as of June 30, there were over 212,000 confirmed cases of COVID-19 in New York City alone.

Quarantines and lockdowns within the city meant millions of people began working from home. With so many now at home from 9 a.m. to 5 p.m., it’s no surprise that New Yorkers had more to complain about when it comes to noisy neighbors and the sounds of city traffic. The data reflects this timeline perfectly, showing a difference of nearly 10,000 additional complaints logged in March (compared to February).

The end of May 2020 came with a new noise in New York City: protests. This unrest was widespread across New York City, with protests in all five boroughs. The sheer volume of these protests can be seen clearly in the data we analyzed. From the beginning of May to the end of June, noise complaints increased by 79 percent. Additionally, complaints of “loud talking” more than doubled from the beginning of April to the end of May, about the time when the protests began.

Battle of the boroughs: Who complains the most in NYC?

Despite having a smaller population than other boroughs, The Bronx has logged the most noise complaints in 2020 so far –– a total of 81,869 complaints logged from February to June.

Because populations differ across the five boroughs, we divided each borough’s total complaints by its respective total population to find comparable percentages.

Borough-specific data is below:

  • The Bronx: 81,869 total complaints (6 percent of the population)
  • Manhattan: 74,661 total complaints (5 percent of the population)
  • Brooklyn: 73,899 total complaints (3 percent of the population)
  • Queens: 49,469 total complaints (2 percent of the population)
  • Staten Island: 6,635 total complaints (1 percent of the population)

A borough rich in local culture, The Bronx has been called the birthplace of hip-hop and salsa, is home to Yankee Stadium and boasts one of the most diverse populations in the city. This diversity could be related to a higher volume of noise complaints, especially since a 2017 study published in the Environmental Health Perspectives Journal determined that neighborhoods with higher poverty rates and larger minority populations experience more noise pollution than other neighborhoods.

New York City explodes with fireworks

From the beginning of April to the end of June this year, complaints about illegal fireworks increased by a staggering 283,595 percent –– only 19 complaints were logged in April, while complaints in June totaled 53,902. Brooklyn is seeing the majority of complaints about fireworks, with approximately one in three complaints originating from the largest of the boroughs.

Fireworks are the second most complained-about noise in New York City from February to June, with loud music and parties taking the first place prize for the most complained-about noise (157,823 total complaints during this time period). With this in mind, it’s important to note that 311 OpenData categorizes these complaints in their own section, rather than grouping them with other noise complaints.

Here is a breakdown of the noises New Yorkers complained about the most in June 2020: 

  • Loud music and parties: 73,238 complaints
  • Fireworks: 53,902 complaints
  • Traffic: 10,795 complaints
  • Loud talking: 7,213 complaints
  • Construction: 2,014 complaints

While summer fireworks in New York City have always been present, this year is definitely unique. The unusual volume of fireworks has raised many conspiracy theories among New Yorkers, with some claiming the government is using the fireworks to desensitize the public to “war-like sounds.” Others claim the police are using the fireworks as a punishment for the recent protests, while some say New Yorkers are simply bored in quarantine.

Whatever the cause of the fireworks, they are wreaking havoc across the city. Countless residents have been hospitalized with firework-related injuries and the city government has created a police taskforce to curb illegal firework activity, with police donning riot gear and arresting anyone believed to be involved.

New York City has always been loud, but 2020 seems to have turned up the volume in the city. Noise complaints are at an all-time high with no end in sight. If you’re living in New York City this summer, there are easy ways to soundproof your home.

Sources

U.S. Census Bureau | New York City OpenData: 1, 2 | Gothamist | The Atlantic

The post NYC Noise Complaints Increase 279% in Just 4 Months appeared first on Apartment Living Tips – Apartment Tips from ApartmentGuide.com.

Source: apartmentguide.com

The Most Common Renter Complaints That Landlords Hear

The landlord-tenant relationship can be a difficult one to navigate, especially if it involves a lot of renter complaints.

But that doesn’t mean it’s impossible to build a strong foundation with your landlord. Both parties have a lot at stake.

For you, it’s your home and your security deposit, and for your landlord, it’s their income and the property in which they have invested time and money. It’s not uncommon for tension to arise at some point, but how you handle difficult situations can make or break the relationship with your landlord moving forward.

The best initial step you can take to avoid a less-than-stellar landlord is to include an assessment of your potential landlord as part of the decision process when searching for a new place to live. Have they been easy to contact so far? Have they answered your questions and addressed your concerns? Do some background research and see if you can find any reviews from past tenants.

If you do find yourself experiencing one of these common renter complaints, there are steps you can take to try and resolve the situation.

poor communication

Common renter complaint #1: Poor communication

Many renters deal with a lack of communication from their landlords and feel that they’re unaware of certain rules or expectations as they relate to the property. Maybe you sign your lease agreement, move into your new home and never really hear from your landlord again. Or, maybe you’re having trouble with your landlord’s responsiveness to issues like maintenance requests, noisy neighbors or other important questions.

Early on in the relationship with your landlord, ask if they can walk through the lease agreement with you and point out any rules or expectations that are especially important to them (something a good landlord should do on their own.) As a tenant, it’s your responsibility to read through the lease agreement in its entirety and bring up any questions you may have.

Do your best to keep lines of communication open with your landlord — make timely contact about any issues or questions that arise and don’t be afraid to ask for help. If your landlord lives in the same building or is frequently on the property, be sure to be friendly and say hello when you cross paths. Establishing this relationship from the get-go will build trust.

maintenance issues

Common renter complaint #2: Maintenance issues

Maintenance issues and repairs are one of the main reasons you’ll have to get in touch with your landlord throughout your rental experience. Whether it’s something minor like a lighting fixture fix or something major like a water leak, your landlord should be responding and repairing your requests in a timely manner.

Establish your landlord’s preferred method of communication from the get-go. Can you text them a picture of the issue to make sure it’s catching their attention and not getting lost in an email inbox? Are they not as tech-savvy and prefer you give them a call directly? If you don’t already have a tenant portal, ask your landlord if they would consider setting one up so you can easily submit maintenance requests and your landlord can easily track everything in one place.

Be clear on what your responsibility is as a renter and what your landlord’s responsibility is. Make sure to check in on your local laws to figure out what the expectations are on important maintenance issues like water, heating or other habitability issues.

privacy

Common renter complaint #3: Lack of privacy

Sometimes, a landlord might be on the property without actually entering your home. He might comment on whether or not your front porch had been cleared of leaves or whether or not the recycling bin was too full, and it always felt like an invasion of privacy to have him pop up unannounced.

As a tenant, you absolutely have a legal right to the quiet enjoyment of your home and your landlord is required to provide you with at least 24 hours notice before entering your property (unless there’s an emergency situation). If your landlord is showing up for maintenance or inspections without notifying you first, bring it to their attention right away.

If your landlord performs regular inspections, ask if they would be willing to come on the same day every month or give you a schedule for the entirety of your lease agreement. If language around routine inspections isn’t included in your lease agreement, be sure to ask about it before you sign.

money

Common renter complaint #4: Security deposit refunds

It’s always upsetting to move out of a property and learn that your security deposit refund is much smaller than you were expecting — especially if you followed all move-out instructions and didn’t cause any major damage.

It’s important to understand that typically, landlords are not profiting off of your security deposit — they’re using the finances to repair an issue that occurred when you were the renter. Of course, there are situations where this isn’t the case and legal action is the only feasible option.

Before you move out, ask your landlord to provide you with a move-out checklist or clearly state their expectations. Refer to any checklists or inspection documents that you may have completed upon move in to make sure you’re leaving the property in the same condition you found it.

Ask your landlord if they would be willing to do a property walkthrough with you before you hand over the keys to address any issues that can be fixed or cleaned before you leave. Take pictures upon move out so you have evidence to show your landlord if need be.

If you are charged or your landlord withholds your security deposit, ask for an itemized list of the deductions so you can clearly see where your money is going.

Keep it friendly

Establishing a positive relationship with your landlord from the beginning and keeping lines of communication open will make it easier for both parties to deal with any issues that arise down the road.

The post The Most Common Renter Complaints That Landlords Hear appeared first on Apartment Living Tips – Apartment Tips from ApartmentGuide.com.

Source: apartmentguide.com

The Ultimate Guide to Different Apartment Types

Apartment? Loft? Flat? Condo? Duplex? What do all those terms mean anyway? And you said rent is HOW MUCH? Bring on the face palm emoji.  When you just want a place to live that won’t cost you an arm and a leg, the different housing terms and buzzwords can start to run together in your […]

The post The Ultimate Guide to Different Apartment Types appeared first on Apartment Life.

Source: blog.apartmentsearch.com

Is Being Debt Free Worth it?

I had a great talk with Millennial Money Man yesterday and my favorite piece of advice he gave me was to “write what you’re passionate about.” It took me literally five seconds to think of the one thing I’m really passionate…

The post Is Being Debt Free Worth it? appeared first on Modern Frugality.

Source: modernfrugality.com