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8 Ways to Establish Credit Without a Credit Card

Using a credit card isn’t the only way to establish a credit score. If you’re looking to build your credit but don’t want to rely on a credit card, we’ve come up with 8 alternative ways that can help you create or boost your score.

8 Ways to Establish Credit Without a Credit Card

Note: Many of these methods are best used if you’re not carrying any debt, so it may be worth using a loan payoff calculator to figure out a debt repayment plan and become debt-free first.

How to establish your credit score without a credit card

1. Rent

Timely rent payments can boost your credit score as long as they’re reported to the credit bureaus (Experian, Equifax, and TransUnion). You can check with your landlord to see if they’ll be willing to submit your payments.

2. Personal loan

With a personal loan, you’ll take out a specific amount of money and pay it off with fixed monthly payments. On-time payments will help establish your credit score. However, a lack of credit history will likely result in you having to pay a high interest rate.

3. Mortgage

If you’re planning to buy a home but don’t have a credit history, it can be difficult to secure a mortgage. However, it isn’t impossible. Some mortgages, such as FHA mortgages, and some credit unions offer mortgages to individuals with limited credit histories. While your score will drop when you first take on such a large amount of debt, it will increase over time as you make regular payments.

4. Auto loan

Many auto loan dealers will report your payments. And since auto loans are secured by collateral, a.k.a. your car—meaning your car could get taken away if you default on your payments—you might be able to qualify even with limited credit.

5. Federal student loans

If you’re a student or recent graduate, your federal student loans can help you build credit. Most federal student loans don’t require you to have a credit history (unlike private student loans) and they get reported to the credit bureaus. Positive payments will boost your score, though missing or late payments will have a negative effect.

If your parent holds this loan for you they can use a parent plus refinancing company to transfer the loan into your name, while maintaining the lowest interest rates possible.

6. Phone plan

Depending on your phone provider and the type of contract you have, your phone payment history might be reported. While signing up for a phone might cause a hard pull to be placed on your credit report, the ding to your score should only be temporary assuming you make on-time payments.

7. Credit builder loan

With a credit builder loan, you borrow a small amount of money, which is held in a savings account or CD until the loan gets paid off. Once it’s paid off, you’ll be able to access both your funds and any interest earned. Your payments get reported so you’ll be able to establish credit, assuming you have a positive payment history.

Credit builder loans have attractive interest rates and are available to individuals with poor or limited credit. Credit builder loans are typically offered by community banks or credit unions.

8. Peer-to-peer loan

Peer-to-peer loans are loans made by a single investor or group of investors, rather than a bank or traditional lender. Any interest accrued goes to the investors. P2P loans may accept borrowers with lower credit scores. If you’re interested in taking out a P2P loan, be sure to check whether your payments will get reported.

Hopefully, one or more of these methods will be a good fit for your credit building needs. Stay patient and focused on your credit-building journey. We know you can do it!

By Stefanie Gordon

Stefanie Gordon is a content strategist with over a decade of professional writing experience. She is a former financial journalist who has spent the last several years working in digital marketing. She specializes in content strategy and creation for large and small businesses in finance and technology.


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