A person who successfully built their credit score without a credit card

How to Build Credit Without a Credit Card

Back to All Posts

All Posts

No credit card? No problem. Build credit without a credit card through smart strategies

Need to build credit? Easy! Just use your credit card for a few big purchases, then pay down the balance over time.

But wait – what if you don’t have a credit card, either because you don’t have a credit score or your credit score is too low to get approved? Are you out of luck? Not exactly.

In fact, you can learn how to build credit without a credit card with a few tricks and by using the financial tools you currently have access to. Let’s break down these tips one by one now.

Make bill/utility payments on time

Even if you don’t have a credit card, odds are you do have one or more bills or utility payments under your name. Gas and electric bills, rent payments, and car payments all contribute to your credit score.

The best way to build your credit? Make those payments each month on time and in their full amounts. When you pay your bills on time, you show the major credit bureaus you can be trusted with loans and credit cards.

A calendar showing upcoming bill payments to pay on time to build credit.

In contrast, missing a utility bill or not making your rent payments on time can crash your credit score faster than you may think.

To make sure you don’t accidentally miss a bill payment, set your bills on auto-pay. Any bills will be automatically paid directly to the bank account you assign to them. It’s a lot easier than remembering to write a check or make an electronic deposit every month for each bill!

Pay off any loans and debts

If you don’t have a credit card but took out one or more loans for car repairs, personal purchases, or even a vacation, pay those loans off ASAP. Taking out loans and paying them off on time (or even early) can enhance your credit score, especially if the loans are for big amounts.

Say that your car was damaged in a recent accident and you took out an auto repair loan to cover the cost of replacing its front bumper and a light. Once your car is repaired, pay off the auto repair loan aggressively. Make at least the minimum payment amount each pay period, but consider paying down the loan faster than agreed for an even better bump to your credit score.

The longer you have loans and debts in your name, the slower your credit score will increase. It’s also wise to be careful when considering a new loan; if you fail to repay the balance on time each month, your credit score will go down instead of improving.

Apply for a credit builder loan

What if you’re “credit invisible” – that is, the big credit unions don’t have any records of you and you can’t take out a loan because of this? In that case, you might be able to apply for a credit builder loan.

Credit builder loans are intended for individuals with little or poor credit and aren’t often given out to people who already have stable credit scores. As their name suggests, credit builder loans are intended to help you build credit instead of paying off a big purchase or serving as an emergency source of financing.

When you use credit builder loans smartly, you can bump up your credit score by tens of points in a matter of weeks or months. Once you get your initial credit score, you might find that it’s 600 or above right off the bat: perfect for approval for a quality credit card.

How a credit builder loan works

Credit builder loans work differently from other loans like personal loans, auto repair loans, and so on.

These installment loans are often offered by smaller banks, credit unions, and similar financial institutions. After you pay off the loan and receive the balance, consider placing it in a savings account to serve as an emergency fund for the future.

Start a savings account

One last tip – you can increase your chances of getting approved for a credit card by opening and keeping a savings account with at least a few hundred dollars tucked away for a rainy day.

A savings account may not build credit directly, but it can still affect your credit score. How?

Woman opening a saving account with her money to build her credit score without a credit card.

In a nutshell, when you apply for a loan or credit card, the lender will ask for bank and savings account numbers to see if those accounts are in good standing. If you have a checking and savings account in good standing with your bank or credit union, that tells the lender you can responsibly handle funds.

Once you have good credit, your savings account will make it more likely you’ll be approved for the best credit cards with good interest rates, credit limits, and few/no fees.

How fast can you build your credit?

For most Americans, it takes several months to get an initial credit score and build it up by 100 points or more. It’s best to think of credit building as a marathon rather than a sprint. Adopt good financial habits, pay your bills on time, and take out loans wisely.

If you have poor credit and want to improve it ASAP, practicing each of the above strategies in tandem will accelerate your credit-building efforts.

Good credit is never far away

No matter your financial history or your credit score, remember that good credit is always within reach. Starting from the bottom is never easy, but you don’t have to go through your credit journey alone.

The information and materials provided on this website are intended for informational purposes only and should not be treated as an offer or solicitation of credit or any other product or service of Regional Finance or any other company. This website may contain links to websites controlled or offered by third parties. We have not reviewed all of the third-party sites linked to this website and are not responsible for the content, products, privacy policy, security, or practices of any linked third-party website. The inclusion of any third-party link does not imply any endorsement by Regional Finance of the linked third party, its website, or its product or services. Use of any third-party website is at your own risk.

References accessed December 18, 2021:

Who are the Credit Invisible?

How Long Does It Take To Improve Your Credit Score?


Related Posts
With us, you don't need perfect credit to get a personal loan.

You can prequalify for your personal loan online in just minutes by clicking prequalify now. Or, if you prefer, call or stop by your local branch to get the process started. Our loan specialists can answer any questions you may have such as what a personal loan is, understanding personal loan interest rates, and how to qualify for a personal loan. We’ll help you fill out an application for the type of loan that fits your needs.