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Go From No Credit to Great Credit In Just 18 Months

For many Americans, credit cards are a very daunting financial instrument. It’s easy to get reeled in by clever sales pitches that seem to promise free money. Indeed, zero-percent introductory rates, signing bonuses, and other offers make credit cards sound like an amazing deal. If you’re responsible with money and have a good plan in place, credit cards can make saving easy. But if you aren’t responsible, It can be just as easy to fall behind on payments and slip into costly debt. The good news is, if you need to repair your credit or have almost none at all, using credit wisely can be a great way to put you back on solid ground and reap the rewards of a good credit score.

“You don’t need to stay in debt to build credit.”

Credit Myths

The surprisingly simple method to building a healthy credit score1 in less than 18 months comes from Forbes contributor Nick Clements. Spurred by seeing plenty of bad advice surrounding credit cards and debt, Clements shared his method. He mentioned one particularly strong warning from another personal finance writer who warned against using credit cards. The writer doled out some false information seen all too often: In order to build credit, you need to stay in debt.

This myth has persisted for some time and may have convinced untold numbers of people to forego paying their credit card balances in the hopes their scores would improve. This represents a fundamental misunderstanding of how credit cards work and how credit scores are calculated. When a card user receives a statement, they can pay either the minimum amount or the full statement balance. Paying only the minimum on time is enticing and will improve your credit score, but you will be charged interest by maintaining a debt on the balance.

An Easy Alternative

Instead, as Clements suggested, you should just pay the full statement balance each month, on time. Doing so will still register as an on-time payment, which is a key part of your credit score, but it will not cost you any extra money. Clements compared this concept to a phone bill. Using a phone puts you in debt to the phone company, but once you pay off your bill in full, that debt is cleared.

If you’re racking up debt in the hopes of improving your credit score, there’s a cheaper way to go about it.

A great way to build credit is to use your card to pay your phone bill. Simply set up an automatic payment on your phone bill, or any other recurring service you use. Then set up automatic payments for your credit card via your checking account. Be sure to select the option to pay off the statement balance, not just the minimum balance. Since timely payment and low credit utilization rates comprise 65 percent of your credit score,2 according to MyFICO.com, making automatic payments on a fairly inexpensive recurring bill is an easy, and essentially free, way to boost your credit score. Clements claims his wife was able to go from no credit to a score of 700 in just 18 months by using this strategy.

If you don’t already have a credit card because of bad or nonexistent credit, a secured card may be a good option,3 according to Bankrate. These work like regular credit cards but require a security deposit to be activated and usually have lower credit limits. Once you receive any type of credit card, including secured, make sure to pay off your entire balance monthly.

Getting great credit does not need require getting into debt.  It just requires smart use of the debt available to you.  By paying off your full credit debt monthly, no interest payments will be made and your credit score will increase.

The views expressed by the articles and sites linked in this post do not necessarily reflect the opinions and policies of Cash Central or Community Choice Financial®. 


1Clements, Nick. (2015, Nov 5). Retrieved from: http://www.forbes.com/sites/nickclements/2015/11/05/how-to-build-an-excellent-credit-score-without-borrowing-money/

2MyFico. Retrieved from: https://www.myfico.com/credit-education/whats-in-your-credit-score

3Johnson, Holly. (2022, Jun 27). Retrieved from: https://www.bankrate.com/finance/credit-cards/what-is-a-secured-credit-card/

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