These days, more and more of us are looking for ways to build our credit scores. Whether we are attempting to raise our score and buy a home or are simply trying to boost our rating to take out a credit card or a car lease, finding new ways to boost our credit has taken center stage in our minds.
But building our credit score isn’t an easy task. Instead, it leaves many of us stressed out and panicking, wondering how to build our credit, especially if we already have poor credit. It can frustrate us, and then we remember, we pay our phone bill every month and wonder, does a cell phone bill build credit?
Could this be the answer to your prayers? Let’s find out if a cell phone bill can help you build credit or not! Don’t worry; we’ve got some other tips for building your credit score too!
Yes, you can use your cell phone bill to build credit! Previously, you could not, but now, it is counted on many credit score-checking websites and banks.
It’s fantastic news for 95% of people that have a cell phone. Paying your monthly bill in full and on time shows that you are responsible and can pay on time.
Over time, it can boost your credit score and help build credit. It’s a great step onto the ladder for those that currently don’t have credit. Most people can usually be approved for a cell phone contract or plan, making it one of the easiest ways to build credit.
But while it can help to build your credit, it should not be the only avenue you explore. Cell phone contracts are fairly easy to get; they will build your credit, but not as much as other methods.
Some credit score checkers or banks won’t consider a cell phone contract on its own, so it’s best to explore other avenues too.
Thankfully there are some simple ways to build your credit along with your cell phone, and we can take a look at those now!
For those looking to build your credit score, you can use one or some of these tips below. Incorporate as many as you see fit, and remember to seek financial advice if you have any concerns.
Open a secured credit card.
Secured cards work similarly to unsecured credit cards, but you will need a cash deposit that equals the credit line. It provides security to pay your credit card bill and avoid spending more than you can afford.
Paying the bill in full and on time will allow you to boost your credit score! You can use the secured credit card for any purchases you want; it’s a good idea to make purchases that you want to be protected on your credit card, providing that you can pay the full balance on time.
You might want to pay your streaming subscriptions on them and pay them off. This small act will show lenders that you can borrow and repay the money on time, allowing you to access loans, car leasing, or mortgages later down the line.
Get a retail credit card.
These days, most stores offer credit cards that can be used in their store or other stores. These tend to be less restrictive, and you can usually apply for one in-store with your shopping. You will need to be careful with these as they have high-interest rates.
They won’t be as restrictive as a secured credit card, so take care to avoid raking up bills that you can’t pay off – that won’t help your credit score! Keep an eye on your spending and only use it on what you can afford to pay for.
Pay your bill on time and in full to avoid the interest charges. You can use this card on your shopping or purchase groceries, for example, and pay it off when the bill or statement arrives.
Try a collateralized loan.
If you don’t have the best credit score, or there isn’t much on there, you can consider secured loans. You pledge an asset the lender can claim if you default, such as a car, which means the lender is taking less risk. It can help you qualify for loans you would otherwise be rejected for.
Providing that you make regular repayments on time, your credit score will improve, and you will have access to loans with better interest rates or larger amounts.
Remember that the goal here is to boost your credit, not live beyond your means. Take great care not to spend more than you can afford.
Ask a credit-worthy friend to cosign a loan.
If you need cash, you can ask a friend who has a good credit score to cosign your loan with you. Make sure that you choose a trustworthy person to do this with and make them aware you will be responsible for making the repayments.
You must not fall behind on these or stop paying, as your friend will be liable. It provides the lender with the reassurance that the loan will be repaid. Paying the loan back on time will help boost your credit score and avoid incurring additional charges.
And just like that, we have come to the end of our credit score journey today! As you can see, your cell phone bill can help boost your credit, but it should not be the only method you choose.
Opt for one of the above methods, like a secured credit card, to help boost your score and show lenders that you can repay the money. When the time comes to apply for a mortgage, you will be grateful that you took these steps!
Remember to seek advice from financial experts if you have any difficulties or are worried about your finances. They can offer tailored advice and help to boost your credit score if need be. You do not need to worry about money alone, and plenty of people can help.