Building Your Credit Score: Tips For Texans With Limited Credit History

Good credit opens doors to financial opportunities, from better loan terms to premium credit cards. For Texans starting with no credit or trying to improve a low score, the journey can seem challenging. Thankfully, there are actionable strategies to improve your credit today. Plus, if you're in need of emergency funds while building credit, title loans can be an immediate solution.

10 Tips For Building Credit Right Here In Texas

No matter your credit background, you can improve your credit score with these helpful strategies for building credit in Texas.

1. Become An Authorized User

If you have no credit, you may not gain approval for credit cards or loans. So, becoming an authorized user of your friend's or relative's credit card is a credit-building method that doesn't involve you getting your own card. As an authorized user, you can make purchases and be given your own card linked to the primary cardholder's account.

The payment history and the account in general will appear on your credit report – which will make building credit much easier for you. However, before asking your relative or friend if you can use their credit card as an authorized user, ensure the lender reports authorized users to credit bureaus. If they don't actually report it, this option won't help you achieve good credit at all.

2. Get A Secured Credit Card

A secured credit card can be a great way to build credit. This type of card is often easier to qualify for than traditional unsecured cards as it necessitates an upfront deposit that "secures" it. Both the deposit amount and credit limit will differ based on the specific credit card. However, they tend to be equal to the amount of your deposit. On top of that, some providers will charge an annual fee. Make sure you shop around for the best deal.

3. Report Rental Payments

On-time credit card payments aren't the only way to build a healthy credit file; your monthly rental payments can be added to your credit history for faster positive growth. All you need to do is sign up for a rent reporting service and you'll see the difference on your report. This is an especially good option if you currently have no credit and want to build it up in a safe way. You can also do this by reporting your utility payments as well.

4. Use Cards Responsibly

The next thing you can do when building credit is make sure to use it responsibly. Having credit cards open in your name isn't enough — you need to use them and make timely payments every chance you can. Misusing these credit cards – or not paying at least the minimums on time – will do you more harm than not having accounts open at all! So do your best to make your payments on time and limit the amount of times you use your credit cards entirely.

5. Open A Low-Balance Card

Some providers offer low-balance cards for new credit owners. You don't need a financial history to qualify. Generally, you'll simply need to prove that you pay your bills on time and live a financially responsible life. Starting lines tend to be around the $200 mark, allowing you to kickstart your credit journey from the bottom. If you can, open up to three low-balance credit cards for best results. You'll build a positive report much faster. 

6. See A Credit Counselor

If you don't feel like you can tackle your credit score troubles alone, you can speak to a credit score counselor who can help you out. They will offer tailored guidance on all sorts of financial topics like your credit score, helping you take control and regain a stress-free life with your finances. They can even help come up with a money or debt management plan for you to pay off debt for good.

7. Secure A Credit-Builder Loan

A credit-builder loan is an installment designed to help you build a positive payment history. Typically, personal loans give you access to a lump sum of money that you'll repay over time. A credit-builder loan, however, turns that concept on its head, depositing monthly payments into your account every month. But it does more than just help you build your credit.

You'll actually leave the loan with a decent chunk of savings. At the end of the term, you'll get your money back (minus any fees or interest charged by the lender, of course). Since lenders may look at your income or banking history to determine your approval, these loans are great for those with no credit who need a loan. 

8. Get A Loan With A Cosigner

Getting a loan with a cosigner is a tried-and-true method for building credit from scratch. What you need to do is find somebody to agree to cosign on a loan with you. Your cosigner will be responsible for the loan if you miss a payment. This means this option tends to be quite a big commitment for the cosigner if you see that you can’t pay the loan on time.

Plus, they need to have a good credit score and a favorable debt-to-income ratio to cosign the loan. The good thing is – as long as they have a good credit score – anybody can cosign on a loan with you, including partners, relatives, friends, or guardians. The closer they are to you, the better! Just make sure you are able to make the loan payments so you don’t negatively impact them.

9. Acquire A Good Debt-To-Credit Ratio

Your credit score is dependent on many things — your debt-to-credit ratio (otherwise known as credit utilization rate) being one of them. Put simply, the more credit you have, the higher your chances of achieving a good credit score. You should aim to use less than 30% of your total credit (i.e., across all your accounts). If you have a credit card with a $1,000 limit, you shouldn't use more than $300.

10. Keep Accounts Open

Sometimes, you'll open a credit card account and then find a better offer elsewhere later on. The logical decision upon transferring your balance is to shut your previous account down, but this isn't savvy when you're trying to boost your credit. Instead, keep your first account open with a zero balance. Why? Because it lengthens the time you've held credit, improving your score.

11. Explore Title Loans as a Credit-Building Solution

While building credit takes time, title loans offer immediate access to cash when facing emergencies. They can help Texans cover unexpected expenses like medical bills or car repairs, which could otherwise lead to financial setbacks. When used responsibly, title loans can be a stepping stone to improving your overall financial standing.

But Do Loans For Bad Credit Exist?

The good thing is, if you happen to have bad credit but still need a loan, you still have small loan options! While we highly recommend building credit, achieving a good credit score right away isn't going to happen. So, if you need monetary help in the meantime, you can turn to us at Texas Car Title and Payday Loan Services Inc. for either our title loan, payday loan, or installment loan. Any of our three loans can help you cover emergencies like medical bills, home repairs, and car repairs.

Unlike traditional loans, we won't ask you to contend with a bunch of requirements or go through a tough process. Instead, you'll only need a handful of required items – that do in fact differ slightly depending on the type of loan you want – and at least half an hour to complete the process! Plus, we are always here to help you out no matter which loan you want! Take a look at this quick guide to figure out which loan may suit your circumstances:

• Title loans are for people who:
• Own their car, truck, or van outright.
• Need to borrow up to $15,000.
• Have a lien-free title in their names.
• Payday loans are for people who:
• Have to borrow between $100 and $1,200.
• Need money between pay periods at work.
• Don't mind coming into the nearest store.
• Installment loans are for people who:
• Need to borrow between $100 and $1,500.
• Don't worry about us checking their credit.
• Have an active bank account in their name.

Start Working Your Way To A Good Credit Score Now

Building credit with these tips sets the foundation for financial success. Remember, if you need cash before achieving a high credit score, consider our title loans to help bridge the gap. And remember, if you need emergency cash before you've achieved a good credit score, feel free to get in touch with us at Texas Car Title and Payday Loan Services, Inc. right now. Just go to our website to complete our simple online application or give us a call at 1-800-227-4707.

 

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.