How To Build Credit Without a Credit Card

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Contributor, Benzinga
August 7, 2023

While credit cards are the most common way to build credit, building credit without a credit card is easier than expected. Did you know that you can get credit for paying utility bills on time? From credit-builder loans to secured credit cards, Benzinga shares the financial tools to build a strong credit history over time. Read on for step-by-step instructions on how to build credit without a credit card. 

Can You Build Credit Without a Credit Card?

It is possible to build credit without a credit card. For those who don’t want a credit card or can’t get one, alternative methods range from credit-building loans and secured credit cards to becoming a co-signer on someone else’s credit card. 

Whether you choose to use a rent reporting service to get credit for past on-time rent and utility payments or take a secured loan, the key to building a strong credit history remains on-time payments in full. The tools on this list don’t work well without responsible financial behavior. 

While considering alternatives to build credit, create a financial strategy and sustainable payment plan to prevent harming your credit and ensure success in any credit-building approach.

How To Build Credit Without a Credit Card: 9 Strategies

Here are nine ways to build credit without a credit card, including what you need to know to get started if you’re building credit from scratch:

1. Secured Loans

Secured loans require some assets as collateral. These differ from traditional loans, which offer funds on credit or the basis of credit history. With a secured loan or loan for low credit, the borrower must provide collateral that acts as security for the lender. Collateral can include property or other valuable assets. 

To build a positive credit history with a secured loan, making timely payments is essential.

2. Credit-Builder Loans

A credit-builder loan is a specialized financial product designed to help people build credit. With a credit-builder loan, you pay the bank an agreed-upon percentage of the loan amount each month. You get access to the full amount at the end of the loan period. For example, if the credit-builder loan is $1,200 and one year long, you’d pay $100 per month. At the end of the year, you’d have that $1,200 transferred to your bank account.

With a credit-builder loan, payments are reported to credit bureaus as loan repayments, allowing you to build credit history. Responsible loan management can have a significant positive impact on credit scores.

3. Secured Credit Cards

Secured credit cards work more like debit cards but allow you to establish or improve credit. Secured credit cards typically have low credit limits and require paying a cash deposit upfront to secure the credit line. 

Over time, responsible credit card use can positively impact credit scores. Secured credit cards are a way for someone who couldn’t qualify for a traditional credit card to demonstrate responsible credit usage and establish a good credit score. 

4. Become an Authorized User

Becoming an authorized user on someone else’s credit card is one of the fastest ways to build a credit history or improve your credit score. You’ll gain the benefit of the other person’s positive credit score and the length of their credit history, potentially boosting your credit score even in the first month.

Of course, if they give you access to a credit card, you should only use it for purchases agreed on with them ahead of time. The risk of becoming an authorized user lies in choosing someone with a poor credit score or who suddenly cannot pay off their credit cards. For that reason, it’s essential to choose a responsible cardholder with a good credit history.

5. Rent Reporting Services

A mortgage is another way to build a credit history, but even renters can benefit from on-time payments through rent reporting companies. Rent reporting companies help tenants build credit through on-time rent payments. With a rent reporting company, you can report up to two years of past on-time rental payments. This can be enough to establish a credit history or boost your credit score significantly. Experian offers a similar service called Experian Boost. 

Look for the best rent reporting companies online or ask for local recommendations. You can sign up in a few minutes. 

Rent reporting companies may report to one, two or three of the main credit bureaus. The reported data could affect your credit score in the first month. To find the best company, choose one with low fees that reports at least two years of rental data to all three main credit bureaus (Experian, TransUnion and Equifax).

6. Peer-to-Peer Lending

Peer-to-peer lending platforms allow you to act as a lender or borrower. These online platforms facilitate borrowing from individuals instead of traditional financial institutions. Generally, peer-to-peer lending platforms also report to all three credit bureaus. 

If you take a small loan on a peer-to-peer lending platform and pay it back responsibly, you can build a credit history without a credit card or a traditional bank. Of course, to get the benefits, it’s important to repay loans on time.

7. Utility Bills and Cell Phone Payments

Some utility companies and cell phone providers report payment history to credit bureaus. In that case, consistent on-time payments for these services can contribute to credit building. If your utility company doesn't report on-time payments, many rent reporting companies have an add-on option to report utility payments, potentially increasing credit-building power. 

8. Credit Counseling Services

Credit counseling services help people manage debt and improve their financial habits. Enrolling in such programs can indirectly support credit-building efforts by offering the support and insight to get out of debt, use credit responsibly, and plan to take advantage of the other options on this list in a way that makes sense for your finances. 

9. Become a Co-Signer

Becoming a co-signer on a loan or mortgage will impact both the primary borrower’s credit and the co-signer’s credit. For that reason, the need for trust and responsibility when considering this option is exceptionally high. 

If you have a trusted friend or relative with a strong credit history who is taking out a loan, becoming a co-signer is a way to build credit history. Assuming they make all payments on time, you won’t be responsible for any payments, but your credit history will gradually improve from their responsible behavior. 

How to Start Building Credit Without a Credit Card

If you’ve been paying rent or utilities on time, you could already build a two-year positive credit history. Add to that a secured credit card or peer-to-peer lending, and you’re well on your way to a good credit score. If you need to build credit faster, consider becoming an authorized user. 

With planning, you don’t need to be stuck with a low credit score. You can build credit without a credit card. Learning how to raise a credit score without a credit card takes persistence, but it can pay off with better interest rates and financial opportunities for years to come.

Frequently Asked Questions


Can I build credit without having a credit card?


Yes, there are many ways to build credit without having a credit card. To get you started, the list above has nine easy ways to start building credit.


How does becoming an authorized user on someone else’s credit card help build credit?


Becoming an authorized user on someone else’s credit card can help build credit as long as they have a good credit score and, ideally, a long credit history.


How long does it take to build credit without a credit card?


When you build credit without a credit card, you could start seeing results within a month. But credit building is a long-term process, and building a good credit score can take a year or more, depending on your financial situation.

Alison Plaut

About Alison Plaut

Alison Plaut is a personal finance writer with a sustainable MBA, passionate about helping people learn more about financial basics for wealth building and financial freedom. She has more than 17 years of writing experience, focused on real estate and mortgage, business, personal finance, and investing. Her work has been published in The Motley Fool, MoneyLion, and she is a regular contributor for Benzinga.