Start building your credit identity now

How to Build Credit History Without a Credit Card

In a Nutshell: Building Your Credit Score and History Without a Credit Card

You need a credit history. Creditors, landlords and even cell phone companies may look at your credit report. A good credit history shows you’re responsible enough to make your payments on time.

So, what do you do if you don’t have a credit history? You need to build one.

That might seem easier said than done, seeing as you usually need credit to get credit. A lot of people opt for credit cards to build their credit. They’re relatively easy to come by and easy to use. Sometimes they’re a little too easy to use and plenty of people wind up with massive credit card debt.

Luckily, a credit card isn’t your only option to build a strong credit history. There are lots of other ways to kickstart your credit without relying on a credit card. Here we’ll consider other options to build credit such as taking out a microloan, or asking somebody with better credit (like your parents) to either co-sign on a larger loan or add you as an authorized user on a credit card. Regardless of the method you choose, building credit now without using a credit card helps establish healthy borrowing habits you can use in the future.

Why Avoid a Credit Card? Credit cards can be an excellent way to build credit, but they’re rarely your best option.

For starters, you have to qualify for a card. Most credit card companies won’t extend their best offers to someone without a credit history. If you’ve been eyeing a card with huge cashback or travel rewards program, you’ll probably need to think again.

Even if you get approved for a card, there are other issues with using a credit card to build your score that can be costly oversights:

How to Build a Credit Score Without a Credit Card

You’ve decided to hold off on getting a credit card, but you still need to build a credit history. Before you start looking for an alternative to a credit card, however, you should understand what goes into a good score.

To build your credit score, you’ll need to follow these rules:

How to Build Credit Fast Without a Credit Card

Building credit takes time. You won’t find a magic solution that gives you an instant credit score.

Still, there are things you can do to speed up the credit building process. Ways to build credit fast without a credit card include:

How to Build Credit Without a Credit Card, and Without Your Parents

Asking your parents to help you get a loan or add you to their accounts is an easy way to build credit. Unfortunately, not everyone can rely on their parents for financial support. If that’s your case, there are still great ways to build credit, even without your parents’ help. One of the best ways to build a credit history on your own is to look for a credit builder loan. A credit builder loan is just what it sounds like: A loan to help you establish credit. Credit builder loans are generally for a smaller amount than other types of loans and usually involve little to no interest. The credit builder loan from Kikoff, for example, is a zero-interest, zero-fee credit builder with no credit check for high approval odds. That means you can start building credit completely free.

The Best Ways to Build Credit History Without a Credit Card

The process of building credit from scratch might seem daunting, especially without using a credit card. Try these strategies to establish your credit history and good credit habits now:

  1. Zero-Interest Credit Builder

    A small loan that has no interest charges you can use to build credit. Generally, these are microloans so you can start adding to your credit history without going into major debt.

  2. Authorized User

    Ask a friend or family member with good credit history is they’ll add you as an authorized user. You don't need to make purchases to increase your credit. Just make sure the card reports you as a user to the credit bureaus.

  3. Co-Signer on Loans

    See if your parents or a relative will co-sign a loan with you to help you make a purchase and build credit. Make sure you have the income to afford the loan so you don’t put the financial burden on your co-signer.

  4. Rent

    Ask your landlord if they’ll work with you to report your rent payments. You’ll probably have to pay a fee for the service, but it could help you get credit for paying rent on time.