Can You Build Credit Without A Credit Card? Here’s How

man hand holding Platinum Credit Card

Most individuals understand how vital building their credit can be. If your credit score is not in the best shape, it’s difficult to do things like secure loans, get mortgages, or rent apartments. You might also know that responsible credit card usage is a sensible way to increase your credit score.

However, you can run into issues with your credit cards if you’re not paying off the balances expediently. That’s when you might need to look into a credit card consolidation calculator to determine how to dig yourself out of debt. Some people stay away from credit card usage entirely to avoid these situations.

Are there ways you can build your credit without a credit card? You’ll be pleased to hear that there are, and we’ll discuss three of them right now.

1. Student Loans

Getting a federal student loan is something you can do without needing to go through a credit check. The major credit bureaus look at student loans like installment loans, similar to mortgages or car loans.

This means that as long as you’re making regular payments, your student loan is something that will demonstrate you are a responsible credit user. Deferring student loans won’t damage your credit score if you decide that’s something you need to do. Just make sure you don’t default on your loan, as that will definitely cause your credit score to take a hit.

2. Pay Other Bills

You likely have bills you need to pay on time, such as utilities, phone, cable, etc. Paying on time should go a long way toward establishing your credit history.

The real key is that you need to take steps to make sure your payments get reported to the major credit bureaus. The bureaus most people regard as the most important or trustworthy are Equifax, TransUnion, and Experian.

You can contact your phone company, cable provider, or whatever entity runs your utilities. Ask them to provide the three credit bureaus with records of the on-time payments you’ve made. They don’t have a legal obligation to do so, but most of them have no problem doing this for you if you make a formal request.

person pay bill online

3. Rent Reporting

Paying rent regularly on an apartment can help you build your credit as well. It’s similar to the situation with phone companies, cable providers, and utility companies. You’ll typically need to contact your landlord and speak to them about forwarding your regular payment information to the three major credit bureaus.

There are different rent reporting services you can look into online. Some of them are subscription-based models. They will contact your landlord each month to ensure you’re paying your rent on time, and they will charge you a reasonable fee for that.

Other services act as go-betweens. Instead of paying rent directly to your landlord, you pay the service, which forwards that money to the landlord. It reports to the better-known credit bureaus as well, which bolsters your credit score.

You Can Build Credit Without a Credit Card

The main takeaway is that you can build credit without a credit card if you get creative about it. Paying your rent regularly and enlisting a little help from one of the services we mentioned can get you started. You can pay your bills and ask the entities you pay to pass that information along to the credit bureaus. Getting a federal student loan and making regular payments on it can be helpful too.

You don’t absolutely need a credit card to build your credit score, so if you’d prefer not to get one, that’s possible. You can still be proactive about building your score and reaping the benefits that come from that.

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