How to Build Credit Without a Credit Card

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Building credit is the key to avoiding snags as you move through everyday life. Using credit cards responsibly is one of the easiest ways to begin building credit. Retail credit cards as well as secured cards that require a security deposit provide a means for those with no credit to build their credit.

But if you can't get one with reasonable fees or prefer not to use one, you might wonder whether you can establish credit and how to build credit without a credit card. You can build credit without a credit card through several different approaches.

Repay Student Loans to Build Credit Without a Card

Whether you take out a federal or private student loan, you'll have to repay any amount that isn't canceled as part of a loan forgiveness program. If you get a federal loan, you may not be required to start making payments until you've graduated, left school, or dropped below half-time status. Private loans are more likely to require you to start making payments while you're still in school, although some allow you to defer payments.

Regardless, you can start building your credit score by making monthly student loan payments while you're still in college and continuing this practice after you graduate. Payments toward student loans are included in your credit reports. Making on-time monthly payments on your loan will help you build your credit without a credit card, whereas late payments can ding it.

Use a Credit Builder Loan

A credit builder loan is similar to a secured credit card. Once you're approved, the loan funds are placed in a locked savings account until you've repaid the loan. Then, the money in your savings is yours to keep. Your payment history is included in your credit report, so payments will boost your credit score as long as you make all your monthly payments on time and don't default.

Your local credit union may offer a credit builder loan to help you build your credit score without a credit card. But many financial services companies also offer these loans. For example, Self offers an online credit builder loan program that reports your monthly payments to all three credit bureaus. You'll pay an administrative fee to get started, plus interest on the loan.

Repay Mortgage or Car Loans

Since both mortgages and car loans report to credit bureaus, making timely payments on either of these loan types will help you build your credit score without a credit card.

The difficult part is getting approved for either of these without an established credit history. With a steady income and good down payment, you may be able to get approved. If you can't qualify for a loan on your own, consider getting someone with good credit to co-sign for you to boost your odds of approval.


Know the risks of co-signing before you proceed. The person who signs the loan with you will be held liable for the loan payments if you can't make the payments on your own. Late payments will affect the co-signer's credit just as much as they will affect yours, derailing your efforts to build your credit.

Pay Rent on Time to Build Credit

Rental payments traditionally have not been included in your credit reports, but new services are working to change this. For example, on-time rent payments may help you build your credit without a credit card if your landlord reports payments through Experian RentBureau or if you enroll in a third-party service like Rental Kharma that reports rent payments on your behalf. 

Try Alternative Credit-Scoring Methods

Traditional credit scoring is mostly based on your history of borrowing money through credit cards and loans. It generally doesn't consider non-credit based payments you make every month, like your utilities, cable, and phone bill.

But novel scoring methods, available through big-bureau services like Experian Boost or alternative credit-reporting agencies like Payment Reporting Builds Credit, use non-traditional information like utility payment data to generate your credit score.

While such a service allows you to get credit for good payment habits without a credit card, it won't help you get a loan if your lender doesn't accept scores from the credit-reporting agency offering it.

Watch out for Scams

The difficulty of building credit without a credit card makes those with bad or no credit an easy target for scammers. Beware of advance-fee loans that prey on vulnerable borrowers. These loans typically guarantee approval and ask for some upfront payment before extending the loan, which legitimate lenders won't do.

Similarly, payday loans that lure borrowers with cash advances won't help you build your credit score since they're not reported to the major credit bureaus. In fact, a payday loan could hurt your credit score if you default and the account is sent to collections.

Final Thoughts on Building Credit Without a Card

Understanding how to build your credit without a card is essential if you can't get an affordable credit card or don't want to rely on plastic for payments. Making on-time payments on loans and other monthly expenses is a viable method for strengthening your credit and increasing borrowing opportunities in the future.

But keep in mind: Permanently opting out of credit cards could hold your credit score back since 10% of your credit score is based on the different types of accounts with which you have experience. Showing lenders that you can be responsible with both credit cards and loans is best for your credit score in the long run.

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The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
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  2. Consumer Financial Protection Bureau. "Do Student Loans Affect My Credit Score?"

  3. Consumer Financial Protection Bureau. "Building Credit From Scratch," Page 1.

  4. Consumer Financial Protection Bureau. "Worried About Making Your Auto Loan Payments? Your Lender May Have Options That Can Help."

  5. Experian. "How Long Does a Mortgage Affect Your Score?"

  6. Consumer Financial Protection Bureau. "3 Things You Should Consider Before Co-Signing for an Auto Loan."

  7. Experian. "Experian RentBureau."

  8. Rental Kharma. "Build Your Credit History With Rent."

  9. Experian. "What Is a FICO Score, and Why Is It Important?"

  10. PRBC. "How It Works."

  11. Experian. "Only Experian Can Raise Your FICO Score* Instantly."

  12. Experian. "How Utility Bills Can Boost Your Credit Score."

  13. Federal Trade Commission. "Advance-Fee Loans."

  14. Consumer Financial Protection Bureau. "I Heard That Taking out a Payday Loan Can Help Rebuild My Credit or Improve My Credit Score. Is This True?"

  15. Experian. "How Long Do Collections Stay on Your Credit Report?"

  16. Experian. "What Affects Your Credit Scores?"

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