How to Build Your Credit Score Without Applying for a Credit Card

You can establish credit by getting a personal loan, paying your rent and bills on time, or becoming an authorized user on someone else’s card.
Written by Jacqulyn Graber
Reviewed by Jessica Barrett
If your current FICO credit score doesn’t qualify you for a credit card or you’re simply not interested in having one, you can improve your credit by getting a personal loan, paying your rent and bills on time, or becoming an authorized user on someone else’s card.
From home mortgages to
car loans
, having bad credit—or even having no credit history—can make large purchases difficult. But a low credit score can also increase your interest rates on smaller purchases, everyday bills, and even your
car insurance
trustworthy insurance broker app
—can help you secure great low rates on coverage, regardless of what your credit report says. But first, read on to discover some great ways to build up your credit without using a credit card.

How to build credit without a credit card 

Opening a credit card, keeping your debt-to-credit ratio low, and making your monthly payments is one of the quickest and easiest ways to build your credit. But if you don’t have good credit already, you may struggle to meet credit card companies’ strict requirements.
Fortunately, there are several other ways you can establish a healthy credit score so that future lenders are more likely to work with you. 

Get a personal loan 

A personal loan is a loan that does not require collateral or security and is offered with minimal documentation. You can typically get them from banks, credit unions, and online lenders, and can be used for pretty much any personal reason—from consolidating debt to paying for home renovations to planning a dream wedding.
  • Usually easy to qualify
  • Great way to establish a line of credit
  • Higher APRs
  • Late payments will quickly lower your credit score
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Repay existing loans 

Do you already have a car loan, federal student loan, or another secured loan? A simple credit-building tactic is to focus on the repayment of these loans. This helps you establish a great payment history and will improve your credit score.
  • Lowers your debt-to-income ratio
  • Larger payments to existing loans can eat into savings

Become an authorized user of a credit card 

Many financial institutions allow existing cardholders to add authorized users. As an authorized user, you receive your own credit card (with your name on it) and can access the account holder’s line of credit—all without ever undergoing a personal credit check. It’s best to only do this with a trusted family member or friend.
  • Positive activity will be reported to credit bureaus
  • If the account holder doesn’t make payments, it can impact your credit

Pay rent and utility bills on time 

Most landlords won’t report your monthly rent payments to credit agencies—but always making your rent and utility payments can still help demonstrate a pattern of financial consistency. For most of us, our rent, mobile phone bills, internet, and utility bills are our most regular monthly expenses.
Ask your landlord and/or telecommunication provider if they work with any rent reporters—such as
Experian RentBureau
—and if they’ll report your positive payment history. You can also sign up for
Experian Boost
, a service that tracks your phone and utility payments each month to help you build up a good credit score.
  • Helps demonstrate consistent, reliable payments
  • Not all companies or landlords report to major credit bureaus

Get a credit builder loan 

If your credit profile is lacking sufficient history, or if you have a poor score, a credit builder loan is a great way to establish new credit or improve bad credit.
Credit builder loans are typically available in amounts from $300 to $1,000. When you apply, lenders place the full amount of a loan into a secured account. Unlike traditional loans, you cannot access the money right away. Instead, you must make fixed monthly payments until you’ve paid off the entire loan. Then, you’ll receive the proceeds.
  • Build your credit without spending extra money
  • Great alternative to a savings account, which doesn’t build credit
  • Can’t access the money right away

Apply for a car loan

If you’re in the market for a new or used vehicle, it may seem like a good idea to pay for the entire car upfront—but applying for a car loan can help improve your creditworthiness in the long run. Once again, just be sure that your finances allow you to make regular, on-time monthly loan payments so that you don’t end up damaging your score even more. 
  • Allows you to build credit while making set monthly payments
  • May require a down payment or co-signer to quality for a good APR
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* checking your rate won’t affect your credit score

What affects your credit score?

Before you can truly build or improve your credit score, it’s essential to understand how credit calculators determine your score in the first place. 
It’s easy to obtain a free credit check online—just make sure you’re not performing a hard inquiry as those can decrease your score. Once you understand your score, you can begin to think about the factors that affect it.

Debt-to-credit ratio 

Your debt-to-credit ratio—sometimes called a credit utilization ratio—refers to the amount you owe across all revolving credit accounts compared to the amount of revolving credit available to you. The best credit card issuers want to see that you have an excellent debt ratio below 30%

On-time payments 

Your loan repayment history has a major effect on your credit score. Consistently making on-time payments will increase your score, while late or missed payments will damage it.
Keep in mind that late or missed payments can hurt your score much faster than on-time payments can improve your score, so it’s important to remain consistent. If you know you won’t be able to make an approaching payment, contact your loan provider to see if they offer any sort of pause or forgiveness.

Credit history

To have a good (or bad) credit score you must have a credit history—that is, you must have open lines (or previously opened lines) of credit in the first place.
Young people often struggle to qualify for major credit cards or substantial loans because their credit files contain limited amounts of credit history. Opening a loan that’s designed for new borrowers—or using any of the tactics above—is a great way to establish a history of positive credit.

Find cheap car insurance no matter your credit score 

Car insurance providers consider a myriad of factors when pricing out your policy—including your credit score. Drivers with good credit typically enjoy better rates—but that doesn’t mean that you’ll be stuck with sky-high
car insurance
premiums if your credit history is less-than-perfect. 
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Generally, opening and using a credit card is a fast and easy way to build credit—but there’s truly no one way to build credit quickly. Paying your bills on time, paying off existing debt, and keeping your credit utilization rate low all help build your credit.
How long it takes to build new credit—or repair damaged credit—depends on your unique financial circumstances
If you are young and lack a credit history, you can build positive credit within a few months by opening a credit card, regularly utilizing only 30% or less of your available credit, and making on-time monthly payments. 
If you have a generally positive credit history but missed one payment, you’ll be able to repair the damage in a few months by returning to good financial habits. 
If you have a long history of late payments, maxed-out credit limits, and defaulted loans, it could take you years to build your credit back up to a satisfactory level.
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