How to Build Credit Without a Credit Card

If a credit card isn’t for you right now, there may be other approaches to help establish or improve your credit


Your credit score can impact your life in many ways. But if you’re not ready to own a credit card or aren’t approved for one, how can you get a good credit score? 

Luckily, there are other ways to start building your credit. Here are a few.

1. Become an Authorized User

Does someone you trust have a good credit score and history? You may consider talking to them about becoming an authorized user on their credit card account.

Becoming an authorized user on someone else’s credit card means you’ll have access to their account and be able to make purchases with your own card. But the primary cardholder will maintain ownership of the account and will be responsible for making payments on time. 

Missed payments by the account holder might negatively impact both their credit score as well as yours. But, on the flip side, their responsible credit use could have a positive effect on your score. Just make sure the lender reports authorized user’s information to the credit bureaus.

2. Look Into a Credit-Builder Loan

According to the Consumer Financial Protection Bureau (CFPB), credit-builder loans are typically between $300 to $1,000 and can be a good option to help build your credit. They’re different from a traditional loan however. With a credit-builder loan, you’re required to pay off the amount owed before you’re allowed access to the money. 

Getting approved for a loan but not having immediate access to your funds may seem contradictory. But the benefit of this type of loan is building a payment history. Lenders report that information to the credit bureaus. And if you’re on time with all of your payments, you could see a positive impact on your credit score. 

3. Use Personal Loans Responsibly

A personal loan can positively impact your credit score if you consistently make your payments in full and on time. 

Personal loans are a type of installment loan that don’t have to be used for a particular type of purchase. And, unlike credit-builder loans, you’re given an approved amount up front. 

You can apply for a personal loan from banks, credit unions, online lenders or other sources.

If you have a lower credit score, you may get higher interest rates. And the higher the rate, the more you could end up paying for the loan. But shopping around to decide which loan is right for you before you apply will have little to no effect on your credit score. Just make sure the lender you choose will report your payments to the credit bureaus. 

4. Pay Rent When It’s Due

Even if your landlord doesn’t report your monthly payments to the credit bureaus, consistently making them on time can help you keep negative information like collections off your credit reports.

There are also ways on-time rental payments could appear in your credit report.  

If you’re a renter, consider asking your landlord if they report your payments to any of the three major credit bureaus: Experian®, Equifax® or TransUnion®.  Many landlords run credit checks on potential tenants, but not all landlords report rental payments. 

You might consider setting up automatic payments to ensure you don’t miss a payment due date. You could also use email reminders or calendar alerts to remind yourself. 

5. Pay Bills on Time

Your payment history—specifically, making on-time payments—can be an important factor in determining your credit score. If you miss paying a bill, it could affect you in a number of ways. Even if your payments aren’t typically reported to credit bureaus. 

6. Practice Good Credit Habits

Whether you’re building credit from scratch or improving an existing credit score, it’s important to form good habits. 

In addition to making payments on time, these tips could help you improve your score.

  • Create a budget. Creating a budget to compare your income to your expenses is a key step to reaching your financial goals, the CFPB says. Seeing where your money goes each month could help you set aside loan or credit card payments before you start spending each month.
  • Monitor your credit score. CreditWise from Capital One makes it easy to monitor your credit. And it’s free, whether you’re a Capital One customer or not. Plus, using CreditWise won’t hurt your score, so you can check it as often as you like.
  • Request your credit report. Federal law allows you to request one free credit report from the three main credit bureaus every year from AnnualCreditReport.com. If there are any errors on your credit report, they could be negatively affecting your score.

One Credit Card Option to Consider

If you’re not ready or weren’t approved for a traditional credit card, you do have another option. 

Another way you can build credit without a regular credit card is by applying for a secured credit card. They require a security deposit but, with responsible use, could be a good way to build credit. 

Some issuers may not report the status of secured cards. So if better credit is your goal, look for a secured card that reports to at least one of the three major credit bureaus.

With or without a credit card, you can still take steps towards building good habits and a better credit score.


Learn more about Capital One’s response to COVID-19 and resources available to customers. For information about COVID-19, head over to the Centers for Disease Control and Prevention

Government and private relief efforts vary by location and may have changed since this article was published. Consult a financial adviser or the relevant government agencies and private lenders for the most current information.

We hope you found this helpful. Our content is not intended to provide legal, investment or financial advice or to indicate that a particular Capital One product or service is available or right for you. For specific advice about your unique circumstances, consider talking with a qualified professional.

Your CreditWise score is calculated using the TransUnion® VantageScore® 3.0 model, which is one of many scoring models used by lenders. It likely won’t be the same model your lender uses, but it is an accurate measure of your credit health. The availability of the CreditWise tool depends on our ability to obtain your credit history from TransUnion. Alerts are based on changes to your TransUnion and Experian® credit reports and information we find on the dark web. The tool is not guaranteed to detect all identity theft.

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