This Article is About
child care providers
consumer reporting agencies
rental history
credit score
payment history
credit history
Understanding Non - Traditional Credit
Join 1000's of Authors at StreetArticles Today!

Understanding Non - traditional Credit

Many consumers are unaware of the meaning of non-traditional credit or even know that they may already possess non-traditional credit trade lines. Many others do not understand the importance of non-traditional credit when learning how to build good credit history. Whether a consumer is attempting to establish or re-establish themselves credit wise, it will be beneficial to pay attention to their non-traditional credit as well as traditional credit.

Traditional Vs. Non-traditional Credit

Traditional credit consists of regularly paid debts that are reported to the consumer reporting agencies by creditors and will appear on a consumer’s credit report. These debts are factored into the consumer’s credit score. A few examples of traditional credit are mortgages, automobile loans, and credit cards. In contrast, non-traditional credit consists of regularly paid credit debts that are not reported to the consumer reporting agencies and generally do not appear on a consumer’s credit report. These "behind the scenes" debts are not factored into a consumer’s credit score. There are several examples of non-traditional credit, including rental history, utility/cell phone/cable/insurance references, payments to child care providers, rent-to-own appliance payments, etc. A good non-traditional credit reference is one that is paid regularly (preferably monthly), is not direct-debited or payroll-deducted, has at least 12 months of payment history, and is paid on time each month. Three or four credit references meeting these criteria (especially if one is a rental reference) would mean that the consumer has learned how to build good credit history with regards to non-traditional credit.

Who Benefits Most By Developing Non-traditional Credit?

Everyone who utilizes credit would benefit from learning how to develop non-traditional credit history. However, the following consumers would benefit the most:

  • Those who have never established any type of credit history
  • Those with minimal credit history
  • Those with damaged traditional credit who desire to learn how to build good credit history

A consumer with no credit history at all may need to develop non-traditional credit before they can be approved for traditional credit. A non-traditional credit reference may be required for a loan approval. The same holds true for consumers with minimal credit history. Consumers with damaged credit history will need to focus on ways to improve credit scores by developing non-traditional credit while making repairs to their traditional credit. Instead of thinking of traditional and non-traditional credit as two distinctions, think of them as complementing each other to form your whole credit history. In order to qualify for that new cell phone plan, you may need a good traditional credit score. A mortgage lender may want to see a good rental reference before approving you for a loan. Being strong on both fronts may increase your chances of qualifying for the products and services you want in life. Seeking and implementing ways to improve credit scores may make these transactions a lot smoother and may save you money.

Street Talk

No comments present
You May Also Like
Finding the Best Daycare Center Near Calumet City
When it's time to find a fantastic daycare in the Calumet City area, there are a few things you're going to want to consider. This will help you find a daycare that best suits your needs as a parent, and the needs of your child. Education-Rich Environment Most daycares provide…
  Likes: 1

Protect Yourself From Identity Theft And Credit Fraud
The holiday season is fast approaching and consumers are gearing up for their annual trek to the retail stores and to the computer to purchase gifts for their loved ones. Increased purchase activity may attract those people who want to take advantage of others, so there is no better time…
By:  in  Legal  >  Identity Theft   Nov 18, 2011  
  Likes: 2

Insane Interest Free Periods
I firmly believe the credit card firms should be held accountable to some degree for consumers Now, in theory, these are fantastic, IF you are disciplined enough to use it ONLY for that duration. Nowadays we are seeing up to 40 months interest free options, that's more than 3 years!…
By: Dave Page in  Finance  >  Credit   May 28, 2016  
  Likes: 0

Benefit Of Getting Easy Personal Loan In Singapore
In the past years, it may be difficult to take out a loan from a bank. But now, it is easy to get cash help from the money lenders. If you are faced with personal financial situation, it is important to find a good lender. The benefits of getting easy…
By: creditexcel1 in  Finance  >  Credit   Apr 18, 2016  
  Likes: 0

Seamless Chex: Your Fastest Way To Accept Check Payments Online
Do you want to have your check processed in a shorter period but can’t find any bank to do it for you? Worry no more because here comes Seamless Chex that provides a faster way of check payment processing. In as quickly as 60 seconds or less, you can already…
By: Ryan Steyn in  Finance  >  Credit   Apr 15, 2016  
  Likes: 0

Credit Repair to Get the Clean Chit for the Credits And Loans
When we plan to make the make the payment using someone else’s money is in simply terms a credit. Whenever a person applies for a loan or mortgage or even a credit card, it is the fact that they getting the borrowed money from someone who has deposited the money…
By: Smith Davidson in  Finance  >  Credit   Apr 02, 2016  
  Likes: 0

Born2invest As A Storytelling App
There’s something classy about the Born2Invest app. It’s neat, simple, and professional. Unlike any of its competitors, it is deprived of useless web elements typically found in a content curation app. “It is very undemanding and navigable,” said one tech journalist during the app’s official launch in Manila last July.…
By: Arturo Garcia in  Finance  >  Credit   Mar 11, 2016  
  Likes: 0

Find Out About Zone Voucher LTD
People have an increased interest in electronic money, because it has become more valuable than ever and although more and larger retail shops have accepted payment with e-wallet, buying coins and money of all kind is not an easy job. This is where Zone voucher LTD comes in discussion, offering…
By: Sheraton Veranda in  Finance  >  Credit   Feb 19, 2016  
  Likes: 0

Why Corporatecashcreditcom Is So Focused on the 80 Paydex Score
Like many others, you might be wondering why Corporate Cash Credit places so much emphasis on helping clients achieve an 80 Paydex score. Well, unless you are business owners you probably don’t know why an 80 Paydex is so important. Corporate credit is different than personal credit, but businesses must…
By: Cristia in  Finance  >  Credit   Jan 21, 2016  
  Likes: 0

Trans union credit reporting for redress
Trans union credit reporting agency was founded in 1968. In the year 2009, Trans union credit reporting agency could boast of maintaining credit histories of about 500 million consumers in the world over. This information is in line with what's on their web site. No doubt, credit histories can help…
By: Mad Marketer in  Finance  >  Credit   Dec 24, 2010  
  Likes: 0

Your Credit Cards And Allowing Your Teenagers Access to Them
You carry your credit card around with you for making payments. It is a better option than carrying large sums of money when you go shopping and dining. At times when you are so preoccupied with your work, you may have to send your teenagers to do your shopping for…
By: harold harry in  Finance  >  Credit   Apr 23, 2013  
  Likes: 0

Improving Your Credit-simple Steps to Repairing Credit And Improving Your Credit Cores
We all strive to maintain a good credit history and no one sets out to have bad credit. However, circumstances in our lives may leave with no other alternative.  It could be as a result of illness, death in the family, loss of employment, injury, or whatever the case you…
By: Paul Matos in  Finance  >  Credit   Mar 07, 2011  
  Likes: 0

Questions to Ask Your Bank to Find the Best Credit Card for Your Lifestyle
If you are looking for the best credit card for your lifestyle, it’s rather difficult making a choice as there are hundreds of cards available in the market. These cards come with varying combinations of fees, benefits and interest rates. It’s thus better to ask the different banks for this…
By: maddoxpaul in  Finance  >  Credit   Apr 22, 2013  
  Likes: 0

The Safety Of Buying Online
With its speed and convenience, making payments online through payment gateways has become an increasingly popular method of taking care of our day to day purchases and payments. There are those who are hesitant to take this step, having been scared off by worries about identity theft and the general…
By: Natalia7 in  Finance  >  Credit   May 02, 2014  
  Likes: 0

Are Credit Monitoring Services For Me?
Consumers who seek ways to improve credit scores may be offered a vast amount of products and services as they search online. These services may allow them to obtain their credit report, their credit scores, assist them in finding ways to improve credit scores and also help them keep regular…
By:  in  Finance  >  Credit   Nov 11, 2011  
  Likes: 1

Article Views: 1947    Report this Article