Experts: 3 Ways To Build Better Credit With Your Bank
Written by
Laura Bogart
Edited by
Amber Barkley
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If you open your credit statement with a weary sigh, you might not exactly think of your bank, or any financial services provider, as your best friend. At best, you might think of it as a frenemy. You know you could probably use it to get the help you need to make your score the source of a far happier sigh — but you’re not exactly sure how to approach getting that help.
Fortunately, the process of going to your bank to help boost your credit score doesn’t have to be scary. According to the experts GOBankingRates chatted with, you can access some clear, tangible services that can improve your credit score from your friendly neighborhood bank.
Get a Secured Credit Card
Getting another credit card sounds like the absolute last thing you should do if your credit score is low. However, not all credit cards are created equal. A secured credit card might just be the right tool that enables you to rebuild your credit.
Generally speaking, a secured credit card is a unique kind of card that requires a cash deposit that basically “insures” purchases made with that card.
“If your credit has gotten a little out of control and is heading south, you may want to go to your local bank and ask them to help you. Some banks offer secured credit cards,” said Dawn-Marie Joseph, founder of Estate Planning & Preservation. “These types of cards can be used against a balance you have in that bank. It is essentially borrowing from yourself, but with a credit card. Using a credit card with this account can help with your credit score.”
Look Into Services That Help You Pay on Time
Sometimes, life happens, and so do late payments. You get busy. You get distracted. And before you know it, you’re behind on key bills and your credit score has taken a hit. You can’t stop life from happening.
But you can pay your bills on time and protect your credit if you take advantage of key banking services.
“Features like autopay, credit tracking and online billing assistance can aid consumers in consistently paying their bills on time — therefore raising their credit score and improving their financial situation,” said Jared Macarin, personal finance expert with MarketWatch Guides.
Credit Builder Loans
You might be surprised to find that taking out a loan could hypothetically help you boost your credit — well, a specific kind of loan, that is.
The aptly-named credit builder loan, or installment loan, can be a conduit toward better credit. Margaret Poe, head of consumer credit education at TransUnion, broke down how these loans could work for you:
“Your bank may also offer a credit builder loan, which is an installment loan. Instead of receiving money to use for a purchase, the bank or lender sends the principal payments you make into a savings account, which you can access when you’ve paid off the loan. It acts as a way to build credit and savings, less any loan fees and interest charges.”
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