A good credit score is ideal to have in a variety of circumstances, from leasing a car to renting an apartment. Many people recommend getting a credit card as a good first step to building credit. However, many credit card companies in Florida and across the country encourage spending on these cards, and people who are not careful can end up with credit card debt.
Credit cards build credit scores when they are paid off properly each month because they offer lenders a positive payment history. Payment history is the most critical factor considered in determining a consumer’s score. A credit utilization ratio is also factored into this number, and a having credit card can help with that as well.
These positives come with risks, especially for less disciplined spenders. Credit card debt is common in the United States, with the average American household carrying a balance of about $16,000 as of late 2016. Those who do not trust themselves to use a credit card responsibly should try other means of building credit, like paying bills on time or taking out a credit builder loan.
It is a good idea to consider alternatives to building a credit score besides having credit cards. The temptation to spend may be too strong for some, while others may seek the benefits of other credit-building opportunities. Those facing large amounts of credit card debt in Florida may need to consider bankruptcy as an option. Speaking to a lawyer within the state is a good first step in these circumstances.
Source: USA Today, “Improving your credit score: 3 ways to build credit without a credit card“, Maurie Backman, May 8, 2018