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How to Build Credit without a Credit Card

Milad Hassibi April 11, 2018

Having a healthy credit score is key to financial freedom. Whether you are looking to get a mortgage, a car loan, or a personal loan, having good credit can allow you to borrow money at a more affordable rate. Building credit is difficult, but building it without a credit card can be an extreme hassle.

Credit cards are great when they are available, but if you have low credit, getting approved for an affordable card can be tough. You may have had trouble keeping up with minimum payments in the past and want to avoid using plastic when possible. Or maybe you aren’t a fan of keeping track of interest rates and payments which can vary from month to month. Whatever it may be, you want to avoid using a credit card when trying to improve your credit. We have compiled a few ways you can build credit without any plastic whatsoever!

Utility Bills

If you have a standard set of bills you are paying each month (electricity, water, gas, etc.), you can call your utility company and ask to get your payments reported to the 3 credit bureaus. Most utilities report customers to the credit bureaus due to missed payments, but rarely do they report any on-time payment activity.

This can also apply to your rent as well. Be sure to ask your landlord if they can report your rent payments. If your landlord refuses, you can hire rental reporting companies. These companies will report your rent payment information to the credit bureaus for a small monthly fee. Since you are paying these bills already, it would cost you almost nothing extra to have them reported to the credit bureaus.


One of the best ways to build credit without a credit card is through a small loan. Be sure that before you explore this option, that you will be able to repay the loan fully on time. In some cases, the interest rate on a loan can be lower than the rate on your credit card payments, so you can save money by taking out a small personal loan in some cases.

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However, getting a small personal loan at an affordable rate can be difficult without a strong credit history. Be wary of any offers that seem “too good to be true”, as people with poor credit can often become the targets of predatory loans that can only sink you further down.

Authorized User

Being an authorized user on a credit card gives you the best of both worlds: you can have all the Your credit score is increasing when you become an authorized usercredit building aspects of a credit card without any of the negatives. You will most likely have to become an authorized user on a trusted friend or family members card. Make certain that the primary account holder has a good reputation of making on-time payments with a good credit history, as their mistakes can affect your scores as well.

Although your credit will most likely issue you a separate card with your name on it, the account will be under the primary user’s name. You do not have to use the card in any way to gain any of the benefits it can offer.

Final Note

Building a strong credit score without a credit card is difficult but not impossible. It is important to remember that the key to building good credit is discipline and planning. Be smart and vigilant about your money and remember that you do not necessarily need a credit card to be able to grow your credit score quickly.

If you are searching for an auto loan but have been denied due to bad credit, CrediReady can help. We have the largest database of trusted dealers and lenders that work with good people in bad credit situations. Take a moment to fill out our free no-obligation form and get approved for the car you need today.

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