Having a debit card or savings account shows financially responsibility, but won't improve a credit score, even though a debit card "looks" like a credit card. Opening a savings account or account linked to a debit card may boost your creditworthiness in the eyes of lenders. You could opt for a sort of "in between" card known as a "secured credit card."
Identification
Debit cards and savings accounts do not report to the credit bureaus, because they do not extend a line of credit, since you prepay for your purchases. A savings account could affect your credit score if you write a check for more than your balance and the bank sends the overdue bill to a collections agency.
Could Help You Get Credit
Creditors can and must consider nontraditional payment data when no traditional credit history exists. If you open a savings account with a bank, they will probably extend credit at some point in the future after you establish responsibility with the account. At the very least, keeping a savings account is a sound financial strategy and can prove stability to future lenders.
Banking History
Almost everything having to deal with payments has a consumer report. Banks use reports from ChexSystems. Use your savings or debit cards wisely, and banks are more likely to approve you for future accounts because you have a clean ChexSystems report. Having a bank account is important to improving your credit score in the future and meeting financial goals. Mortgage providers, for example, usually only accept checks for payment.
Tip
If you cannot find a lender willing to approve you for a unsecured credit card, consider a secured line, suggests Bank Rate. On a secured credit card, the lender requires a deposit against the limit, so there is little risk to the creditor, but he can still report payments to the credit rating agency. Shop around for secured cards. Some may charge excessive yearly fees, because secured cards are often used by people with no other option for building credit.
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