How to build credit without a credit card?

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Building credit is an essential step in establishing a solid financial foundation. While credit cards are commonly used to build credit, not everyone may be eligible for or interested in obtaining one. The good news is that there are alternative ways to build credit without a credit card. In this article, we will explore various methods that can help you establish and improve your creditworthiness without relying on a credit card.

Pay Your Bills on Time

Timely bill payments play a crucial role in building credit, regardless of whether you have a credit card or not. Payment history is one of the most significant factors considered by credit bureaus when determining your credit score. By consistently paying your bills on time, such as rent, utilities, and other monthly obligations, you demonstrate responsible financial behavior, which can positively impact your creditworthiness.

Consider a Credit Builder Loan

A credit builder loan is a type of loan designed specifically to help individuals establish or improve their credit. Unlike traditional loans, the borrowed funds are not immediately disbursed to the borrower. Instead, the loan amount is held in a savings account or certificate of deposit (CD) while the borrower makes regular payments towards the loan. Once the loan term is complete, the funds are released, and the borrower receives the money. Credit builder loans are reported to credit bureaus, allowing you to build credit history over time.

Become an Authorized User

If you have a trusted family member or friend with a good credit history, you can ask them to add you as an authorized user on their credit card account. As an authorized user, the credit card activity will be reported on your credit report, helping you establish credit history. However, it is crucial to ensure that the primary cardholder maintains responsible credit card usage and makes timely payments, as any negative activity can also impact your credit.

Apply for a Secured Credit Card

While this method involves obtaining a credit card, it is different from a traditional credit card. A secured credit card requires a cash deposit as collateral, which serves as your credit limit. The deposit reduces the risk for the card issuer, making it easier to obtain a secured credit card even with limited or no credit history. By using the secured credit card responsibly and making timely payments, you can build credit and eventually qualify for an unsecured credit card.

Take Out a Credit-Builder Loan

Similar to a credit builder loan, a credit-builder loan is specifically designed to help individuals build credit. However, unlike a traditional loan, the borrowed funds are not immediately provided to you. Instead, the loan amount is held in a savings account or certificate of deposit (CD) while you make regular payments towards the loan. Once the loan is paid off, you receive the funds, and the positive payment history is reported to credit bureaus, helping you establish credit.


Building credit without a credit card is possible through various alternative methods. By paying your bills on time, considering credit builder loans, becoming an authorized user, or obtaining a secured credit card, you can establish and improve your creditworthiness. Remember that building credit takes time and patience, and it is essential to practice responsible financial habits consistently.


– Experian:
– Equifax:
– TransUnion:
– Consumer Financial Protection Bureau: