6 Ways to Build Your Credit Score Without a Credit Card

Photo by pathdoc / Shutterstock.com

Unless you have a ton of cash at your disposal, you’ll probably need credit at some point. Whether you’re buying a home, car or other big-ticket item, most lenders look at your credit score first.

If you have no credit history, begin building credit and boosting your score before you apply for a major loan. Opening a credit card account and using it responsibly is one way to do this, but it’s far from your only option.

Here are a few alternatives to help raise your credit score without using the magic plastic:

1. Ask companies to report on your behalf

Do you have any recurring bills you pay on a monthly basis, such as for rent, utilities, cable or a cellphone? Give the providers a call and request they report your account activity to the three major credit bureaus, TransUnion, Experian and Equifax.

Do this only if you have responsible payment habits, as payment history accounts for 35 percent of your credit FICO score, the most commonly used credit score. This history can have a significant impact on your score if there is not a lot of other data in your credit report.

Companies are not obligated to report to the bureaus, and your request is simply a favor that they have the right to deny. But with any luck, they will agree to your request.

2. Become an authorized user on another credit card

There are pros and cons to becoming an authorized user. If the cardholder has a strong credit background, signing on as an authorized user will enable his or her stellar behavior to improve your credit profile somewhat. But, if the cardholder is less responsible, your credit score could take a hit.

3. Apply for an installment loan

Installment loans paid down over time build your credit score because they show creditors you are a responsible borrower. The credit mix in your file makes up only 10 percent of your FICO score, but the impact has the potential to be greater if the information in your credit reports is limited.

Retailers sometimes offer promotional installment loans to customers with little to no introductory interest for a limited period of time. If you have the cash on hand, it may not be a bad idea to take this route. But be sure you have the total sum of cash available upfront to make timely payments and eliminate the balance before the interest kicks in.

4. Take out a federal student loan

A credit check is not required to obtain a federal student loan. All you need to do is fill out the Free Application for Federal Student Aid (FAFSA) and you’re set. Since it is an installment loan, it can help boost your credit score. Just avoid getting the loan and blowing through the money — getting in debt trouble will end up hurting your credit score over the long haul.

5. Research peer-to-peer loans

Companies such as Prosper and Lending Club offer peer-to-peer loans in an environment where borrowers are connected with individual investors. The interest rates are usually lower than those of traditional financial institutions. Most of the peer-to-peer lenders report to the major credit bureaus.

6. Try an alternative credit score

By reporting your payment history to an alternative to the big three credit bureaus, you can create a nontraditional credit score. Check out a service like Payment Reporting Builds Credit, known as PRBC, to learn more about how an alternative credit score service works.

For more advice, check out:

Do you know of any other ways to improve your credit score without using a credit card? Feel free to share them in the comments below or on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
9 Free Things That Used to Cost Us Money

Not everything is getting more expensive.

This Chase Card Is Great for Groceries and Cash Back on Everything

You could earn more than $600 cash back in your first year just from grocery shopping.

7 Ways Coupons Waste Your Money and Time

Here’s why I hung up my scissors and quit clipping coupons.

9 Houseplants That Remove Toxins From Your Indoor Air

These plants may also do everything from reduce the amount of dust in your home to improve your productivity.

How to Save Up to 70% on 7 Everyday Purchases

Stop getting sucked into paying a premium when good alternatives are available at huge savings.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
9 Mistakes Everyone Makes When Shopping on Amazon

Are you losing money due to any of these missteps?

7 Changes Coming to Social Security and Medicare in 2021

Recently, both Social Security and Medicare made some major announcements about benefits for 2021.

Can a Divorced Widow Claim Her First Husband’s Social Security Benefits?

The rules are complicated when it comes to eligibility for survivors benefits.

Can a Twice-Divorced Woman Claim Social Security Survivors Benefits?

Understanding survivors benefits rules is the key to getting the most from your benefit.

These Are the 10 Worst Cars for Depreciation

Two types of vehicles are especially likely to see steep plunges in value.

9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

10 Things I Always Buy at Trader Joe’s

From snacks to sweets to side dishes, stock your cart with these time-tested favorites on your next TJ’s run.

Longer Trips to This Type of Store May Raise Coronavirus Risk

An airborne-disease expert recommends exiting these stores within 30 minutes.

5 Ways Social Security Will Change in 2021

These adjustments will affect both workers and retirees in the new year.

8 Things You Should Buy at Restaurant Supply Stores

You don’t have to be a chef or a restaurant owner to shop here.

3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

19 High-Paying Jobs You Can Get With a 2-Year Degree

There are easy high-paying majors available in the U.S. — and no bachelor’s degree is required. We’re here to help you find easy degrees that pay well.

Stop Buying These 19 Things Online

The internet has changed how we shop. But for some things, you’re still better off buying the old-fashioned way.

Cut These 11 Expenses Now If You Hope to Retire Early

Like the idea of financial independence? Part of the FIRE equation is cutting costs.

27 Things You Should Never Pay For — and How to Get Them for Free

When you know the tricks, you can save big on all kinds of useful things that others pay for.

4 Tax Credits That Will Be More Generous in 2021

If you are eligible for these tax breaks, they will slash your federal income tax bill — dollar for dollar.

7 Tips for Building an Emergency Food Supply

A pandemic or natural disaster could leave you reliant on your existing emergency food supply. Is your pantry well-prepared for emergencies? Knowing what to stock up on for emergencies can be a difficult task and we’re here to help.

15 Things You Can Get for Free in December

December is here, which means it’s your last chance to take advantage of fabulous freebies in 2020.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.