How To Raise Your Credit Score Without a Credit Card—9 Alternatives
Build strong credit
while you save
A credit card can be a useful tool for building a good score, but not everyone is keen on committing to one because it has potential downsides.
For example, there’s the risk of accumulating debt if you can’t control your spending, and there’s also a high probability that your card will come with a high interest rate—especially if your score is not in good standing. Credit cards also come with fees and hurt your score if you miss a payment.
Luckily, credit cards are not the only way to build your credit score. There are more than nine other methods to get your score to a decent level without the strain of working with credit cards for credit building.
In this article, you’ll learn how to raise your credit score without a credit card and minimize risks while building credit.
Do You Need a Credit Card To Build a Credit Score?
No, you don’t need a credit card to establish credit because issuers are not the only companies licensed to report.
Credit cards are commonly used to build credit because they are widely available and relatively easy to obtain. Card issuers regularly report payments to credit bureaus, which is essential for building credit. Credit cards are also useful for everyday purchases, making them convenient for building credit on the go.
However, credit cards can be risky if you don’t manage your credit card responsibly. If you would rather not get a credit card, you can build your credit through other actions, including:
- Reporting your rent payments
- Becoming an authorized user on someone’s account
- Taking credit builder loans
The specific tool you use to build credit is less important than how you manage it. Consistently demonstrate positive borrowing habits in the key areas that influence your FICO® score to ensure your score continues to increase.
Key Factors That Impact Your FICO Score
While various methods exist for building credit, the key to a strong credit score is consistently demonstrating responsible financial behavior. This means focusing on the factors that impact your score directly.
According to FICO, the most commonly recognized scoring model, these are the five main factors that influence your score:
| Main Factors | Description |
| Payment history | The largest factor impacting your score. Making on-time payments consistently will help improve your score, while missing payments will hurt it |
| Amount owed | The total amount you owe compared to how much credit you’re using. High credit balances hurt your score |
| Length of credit history | The average age of your credit. It shows how much experience you have managing credit, so a longer history is beneficial |
| Credit mix | The diversity of credit in your portfolio. Having a mix of different lines of credit shows you know how to manage different types of credit and is beneficial for your score |
| New credit | The number of times you apply for new credit. Multiple new credit applications ding your score, but the effects of the inquiries fall off after two years |
4 Ways You Hurt Your Existing Credit
Understanding what may be affecting your credit negatively helps you learn and avoid actions that cause your score to stop growing. These are the most common ways you’re hurting your score:
- Failing to make on-time payments—Your payment history accounts for 35% of your credit score, so falling behind on payments has a significant negative impact on your credit. To raise your score, you must show a history of consistent on-time payments
- Closing old accounts—The longer your account history, the more responsible you appear to lenders. So, even if you no longer use your older accounts, keep them open. They add to the length of your credit history, which improves your score
- Applying for several new credit lines at a time—Multiple credit applications on your report demonstrate financial instability or desperation, which is not a good look to lenders. Spread out new credit applications as much as possible to keep your score unharmed
- Maintaining a high credit utilization—Credit utilization is how much of your available revolving credit you’re using, and a high utilization can damage your score. Experts recommend keeping your credit utilization rate below 30% if you’re looking to increase your score quickly
How To Get Your Credit Score Up Without a Credit Card (9 Methods)
There are many ways to increase your credit score without a credit card. Let’s explore nine of them in detail:
- Become an authorized user
- Use an auto loan
- Try a secured credit card
- Pay off existing loans
- Report your rent payments
- Build credit with your monthly bills
- Take a personal loan
- Cut off financial ties
- Get a credit builder loan
Become an Authorized User
If you would rather not commit to a credit card or don’t qualify, you can ask a trusted person to add you to their credit card account as an authorized user. Credit card companies allow users to give a friend or family member permission to use their main cardholder’s account without a credit check.
Becoming an authorized user makes it easy to “piggyback” off the cardholder’s responsible financial habits. The card issuer reports the credit activity to the bureaus, helping you build credit over time without owning a card.
Before you request permission for someone to add you as an authorized user, do a background check first. Ensure that the main cardholder doesn’t overspend or miss payments because you’ll be bound together financially. Any of their negative financial actions will reflect poorly on your score as well.
Use an Auto Loan
Car loans are easier to qualify for than other types of loans, so if you’re interested in getting a new car soon, an auto loan is a suitable option. Auto loans are secured installment loans that use your car as collateral, but they can also help you improve your credit score.
Because auto loans are installment loans, the lender gives you a fixed amount, which you repay over a set period through consistent payments. Successfully managing your auto loan payments will make you appear as a financially responsible borrower.
You can apply for an auto loan through a car dealership or from a bank, credit union, or online lender. The auto lender reports your on-time loan payments to the credit bureaus, which helps to improve your score.
Auto loans also contribute to your credit mix, making your profile well-rounded and improving your score.
Try a Secured Credit Card
Secured credit cards can serve as a practical alternative if you’re unable to get an unsecured version. “Secured” means that you have to provide an upfront security deposit, which the lender holds on to as collateral.
For example, if you put down a $350 deposit, your secured credit card may offer you a $350 credit limit on your card. If you fail to make payments, the lender uses your deposit to cover your debt.
The upside is that secured credit cards are easier to qualify for than regular ones. They have a lower approval threshold because you provide a security deposit in advance. Secured credit cards function like regular credit cards, so ensure you pay your card debt off each month if you hope to raise your credit score.
Pay Off Existing Loans
If you have existing loans you’re defaulting on, such as your student loans, paying them off can benefit your score. Settling debts contributes to the reduction of your score because the total amount of debt you owe accounts for 30% of your credit score.
The faster you clear your debts, the sooner you see positive changes in your credit score.
If you have been making on-time payments toward a federal student loan, for example, review your credit report to see if they’re being accurately reported. Late or missed federal student loan payments significantly affect your credit score, so ensure they’re timely.
If you’re having trouble paying off your loans, try any of the various debt repayment methods to help you settle it quickly, including:
- Debt Avalanche method—This method prioritizes paying off debt with the highest interest rate first, regardless of how large the balance is. Once the highest-interest debt is paid off, take the money you were putting towards it and use it to pay off the next highest one
- Debt Snowball method—This is the opposite of the Debt Avalanche method. You pay off the smallest balance first and continue to the next smallest debt until you completely settle all debts
- 50/30/20 Budget—Allocate 50% of your income after tax to your essential needs. 30% goes to your non-essential needs, and the remaining 20% goes to savings and repaying debts
Report Your Rent Payments
Rent payments are not usually reported to the credit bureaus since landlords are not obligated to do so. However, if you can send your on-time rent payments to the credit agencies, they will include it in your credit report.
If your landlord doesn’t report rent payments, many credit building applications offer rent reporting services. All you need to do is sign up on the platform and provide them access to your on-time rent payments so they can report them to the bureaus early.
Before you use a rent-reporting service, ask your landlord if they’re willing to register and pay the monthly fee to do it for you. This will help you save money and potentially boost your credit.
Note that not every type of credit-scoring model recognizes rent reporting. Newer FICO models, such as FICO Score 9 and 10, incorporate rent payment data in your reports, but FICO Score 8 does not. Many lenders still work with older FICO models, and in such cases, your rent data may not influence your score.
Build Credit With Your Monthly Bills
FICO Score 8 does not yet consider bill payments as a part of the factors influencing your score since it primarily relies on data from traditional lenders with established reporting practices. However, other scoring models may consider your bill payments when awarding your score.
You could make a positive change in your credit score whenever you make on-time bill payments (except if the lender uses FICO Score 8). These bills include:
- Utility payments—Payments for electricity, gas, water, trash services
- Phone bills—Consistent on-time payments for cell phone or landline bills
- Streaming services—Payments for streaming service platforms like Netflix, Hulu, Disney+, Spotify, etc.
- Insurance payments—Payments for car or health insurance and other types of insurance
Experian, one of the top credit agencies in the U.S., offers Experian Boost, a free program that allows you to add on-time payments for monthly bills to your credit report. Although it will not have a direct impact on FICO Score 8, it influences scores that use data from Experian and VantageScore as well.
Take a Personal Loan
Personal loans are less difficult to obtain because some lenders are more lenient with their lending requirements for such loans.
If you’re working towards building credit, you may consider applying for a personal loan. However, you may be required to borrow at a higher interest rate than someone with a good score. You may also be qualified to borrow only a small amount of credit.
Make your loan repayments on time to pay down the debt, and you’ll see an increase in your score.
Cut Off Financial Ties
Your credit history may reveal a financial connection between you and another borrower if you’ve previously opened a joint current account or taken out a loan with them. While it doesn’t affect your score directly, it may limit your chances of getting loan approval.
Lenders may check the other borrower’s credit file when deciding whether to approve your loan, and if they’re in poor financial standing, you may be compromised.
It’s best to cut financial ties with the person by asking the credit bureaus to remove the mutual link. This will help your score grow unhindered by another person’s file.
Get a Credit Builder Loan
A credit builder loan is an ideal solution for borrowers who have a bad credit history or are building from scratch. If you’re having a tough time getting approved for a traditional loan, you can try this alternative.
Companies like CreditStrong offer different types of credit builder loans, which empower consumers to improve their scores by making consistent, on-time repayments.
Unlike traditional loans, CreditStrong locks the loan up in a savings account, and you make monthly payments to unlock it. You only receive the funds, minus the interest you paid, after completing the payment.
To help you build credit, CreditStrong reports all your monthly payments to the three major credit agencies.
Establish Good Credit With CreditStrong
CreditStrong is a credible and trustworthy credit building solution by Austin Capital Bank. It’s the perfect alternative for users looking to build credit without a credit card because it helps you add bank credit and a positive payment history to your credit profile.
The company offers you a secured installment loan or a revolving line of credit with a savings account, allowing you to build your credit score and savings simultaneously. CreditStrong is a better alternative to secured credit cards because you don’t have to pay a large deposit to get started, and instead of spending money to build your credit history, you save.
Anyone can apply for a CreditStrong account, whether they have good credit or not—there is no minimum credit score requirement.
How CreditStrong Accounts Work
CreditStrong offers three main types of CreditStrong accounts:
- Instal/CS Max—The account offers an installment loan that allows you to make monthly on-time payments, building your credit and saving simultaneously. At the end of your loan term, your principal is returned. CS Max offers larger loan amounts and lower monthly payments in comparison to Instal
- Revolv—This account comes with a secured revolving line of credit, helping you lower credit utilization and build credit. It offers a flexible payment schedule, with the option to increase your credit limit over time
- MAGNUM—It provides an installment loan to help you build a significant credit history. It is similar to Instal but offers a larger loan amount and longer term, designed to establish a substantial credit profile
CreditStrong key features and potential score increase are summarized in the table below:
| Account Type | Key Features | Potential Score Increase |
| Instal/CS Max | Installment loan Builds credit and savings Fixed monthly payment | 45 points |
| Revolv | Secured revolving line of credit Lowers credit utilization Flexible optional payments | 62 points |
| MAGNUM | Installment loan Builds significant credit history Larger loan amounts, longer terms | 86 points |
Steps To Open a CreditStrong Account
To open a CreditStrong account, take the following steps:
- Click here to get started
- Choose from the following products:
- MAGNUM—From $30 a month
- Revolv—$99 yearly
- Instal—From $28 a month
- Submit an online application to CreditStrong
- Monitor your progress via your credit dashboard
CreditStrong helps improve your credit and can positively impact the factors that determine 90% of your FICO score.
