How To Build Your Credit Without A Credit Card

How To Build Your Credit Without A Credit Card

If you want to build your credit quickly and easily, get a credit card. Credit cards are one of the best tools for building your credit because they directly affect many aspects of your credit score. 

But some people don’t want credit cards crowding their wallet or they fear they won’t be able to manage their finances when using a card. A cash-only lifestyles has so many benefits. It offers a great way to take control of your finances and directly see where your money is going. However, when it comes time to apply for credit, you could be in trouble.

Choosing to avoid credit cards shouldn’t keep you from doing the things you want to do, however. If you’d like to build your score without a credit card, here are some great options for you:

1. Make payments on time.

The most important way to build credit without a credit card is to always pay your bills on time. More than one-third of your score is determined by your payment history. Late or missed payments can really hurt your credit. Make your payments (utilities, loans, rent) on time each month to avoid dings and keep your payment history clean.

2. Pay off debt quickly.

Many people believe that it’s good to carry debt for a while to show regular on-time payments. But each month you carry a debt will cost you interest and fees that will increase the amount of debt you’ll end up paying over time. Pay off your debt as soon as possible to avoid unnecessary fees that could hurt your debt ratio.

3. Auto Loans.

There are a variety of loans you could apply for to help you build your credit. An auto loan will help you secure property (a car) and will give you an opportunity to build your positive payment history.

4. Federal Student Loans. 

Federal Student Loans can help you build your credit score as you earn your degree. But be careful with these loans. The longer it takes to pay off a student loan, the more you’ll end up paying in interest fees. If you choose to get a federal student loan, invest in a good education that will allow you to pay back your loans quickly. 

5. Rent.

If you have a mortgage payment each month, your activity on that account will automatically be recorded on your credit report. However, 43 million Americans who choose to rent instead of own a home don’t always get that same opportunity. And yet, your rent payment is likely the biggest reoccurring payment you have. Therefore, you should make the most of your on-time payments by asking your landlord to use a third-party company like RentPlus to report your positive rent payments to credit bureaus.

Contact your landlord today to enroll in RentPlus and start building your credit based on something that you’re already doing: paying your rent.

Building your credit doesn’t mean you have to go out and apply for as many credit cards as you can. And, actually, doing so will hurt you more than help you. Building your credit should help you take one step closer to achieving financial freedom. And there are many options available to help you build your credit and strengthen your finances.


What have you done to improve your credit without credit cards? Please leave your answer in the comment section below. We’d love to hear from you.


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