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How to Build Credit Score Without a Credit Card

How to Build Credit Score Without a Credit Card

There's no denying that a good credit score makes life easier. A stellar credit score can come with various benefits. For instance, you can get loans at lower rates. Apart from that, your score greatly impacts car insurance rates, rental opportunities, and even employment prospects. All these show that it is vital to your financial life.

Therefore, you must improve your credit score to achieve the financial freedom you want. The good news is that you can still make your credit score strong or improve it if it's weak. The first step to improving your credit score is to consistently and promptly repay your loans. Whether it is a mortgage, student loan, or credit card, demonstrating responsible borrowing behaviour by paying back the borrowed money on time helps enhance your creditworthiness. But is that so?

To borrow money, you need a good credit score. That is why you should learn how to build a credit score without a credit card. Fortunately, we have solutions for you. No need for a credit card; just follow these simple tricks and watch your score soar.

What's a Credit Score?

A credit score shows how responsible you are for repaying your bills. It is a measure of your financial standing. Lenders use your score to assess whether they can trust you with money. It reflects how responsibly you've managed payments and debt, setting the bar for becoming financially stable. They get such data from the credit agencies, which take note of all your credit. It is possible to improve your credit score, but it won't be easy. More effort is needed to build it. This guide will show you the best way to build credit without relying on a credit card.

What's the Best Credit Score?

A credit score is a three-digit number taken from the credit report. It comprises your payment history and your outstanding debts. Lenders check the score to determine the likelihood of a borrower repaying what they borrowed. To get a credit score that impresses you, having an active account with at least six months of reported activity to the credit bureaus is essential. Achieving this can open many doors and give you great financial opportunities.

Normally, a credit score can range from 300 to 900. A credit score of 300 is poor, meaning there's a high chance you didn't pay the bills in the past. A bad score could lead to a high rate or, in the worst cases, you might not even meet the loan requirements.

A score of 670 or higher is considered a good credit score. You stand a high chance of getting a loan if your score is in that range, mainly because the lender sees you as a responsible borrower.

Is It Possible to Build a Credit Score Without a Credit Card?

Yes. You can build a credit score without a credit card. The credit bureaus receive payments and credit histories from other companies that don't offer credit cards. This means you can still build your score without relying on credit cards.

Below are the ways you can do that:

Repay your debts on time

The most important step to raising a credit score is paying your expenses and loans on time. Failure to do that will affect your credit score, especially if it occurs multiple times.

If you have financial difficulties, consider creating a new budget and finding ways to earn more income. You may start a side gig or ask for a salary advance. These practices could be your only way to avoid getting into debt.

If you're living with housemates, the bills might be under their names, meaning you cannot establish a positive repayment history. To develop your credit history, transfer some bills to your name.

Apply for a Personal Loan

A personal loan could also be your key to reaching your desired credit score. Actually, they are the best when compared to credit cards. The best thing about getting personal loans is that you can use them for various reasons, thanks to their versatility. Whether it is consolidating loans, covering medical expenses, travelling, paying for wedding expenses, or purchasing a car, you are free to use the cash the way you want.

When taking out a personal loan, you always sign a loan agreement showing the date you should pay back the entire amount. But it is advisable to only borrow what you can afford to repay without straining or interfering with your budget. To effortlessly improve your credit score, don't take on too many personal loans, and be sure to pay your monthly bills without missing any payments to avoid hurting your score.

You may also read this: Way to deal with unexpected expenses

Be an authorized user

Believe it or not, you can raise your credit score when you become an authorized user. You can use someone's credit card that has a good credit history. You can use your friends or family member's credit card. See if they can add you as a user to their card. You will make purchases on the card using their account, but the account owner is responsible for paying the expenses made with the card.

When you use the card responsibly, it will reflect on your credit profile, thus helping to build your credit score. However, you should also know the potential consequences before deciding to go this route to building your credit score. Irresponsible use of the card may harm your and the other person's credit and put your relationship at risk. Besides, if the credit card owner fails to make payments on time, it will negatively affect your credit score.

Consider using this option if you trust the person and are confident you can handle the account responsibly. If you can't find a suitable person, consider getting a secured credit card instead. This type of card is designed for people who want to improve their credit score and requires an initial deposit.

Get a Secured Credit Card

Getting approved for secured credit cards is easier than getting unsecured ones because they require a cash deposit upfront from the cardholder. Typically, the amount you deposit for a secured card equals the credit amount you will get. If you deposit Rs. 1000, you will get a credit of Rs. 1000. This works the same as a debit card, but it mostly relies on the cash deposit you made rather than your checking account.

The company you got the unsecured card from should be reporting to any of the credit bureaus. It's important to make sure that any changes you've made are accurately reported in your credit history to maximize the impact of your secured credit card. Failing to do so could mean those improvements go unrecognized.

You may be upgraded to an unsecured credit card by your credit card issuer if you make payments consistently and on time.

Get credit-builder loans

If your credit history is not impressive, a credit-builder loan may be the solution. It's designed to help those with low scores and thin reports get approved for traditional loans that might otherwise seem out of reach. These loans work by saving money rather than borrowing and spending it to improve your credit history.

Consider this loan a practice opportunity that helps you demonstrate your capability to repay the money in a low-risk situation. After your credit score rises, you can now easily secure a loan.

A credit-builder loan is a type of loan where you pay the loan amount until it is completed, then get your funds. After paying the loan in full, you are sure your score will improve significantly. Besides, you will have a considerable amount to put in an emergency fund.

However, there is an interest rate you pay on a loan, and sometimes an application fee is applicable. However, some of these expenses may be balanced out by the interest earned on the savings account where your loan is held. Despite this, you will ultimately bear the cost of this credit-building service.

Observe your credit

Checking your credit report is also a proactive step to ensure there are no errors that could lower your score. Errors can occasionally arise and harm your credit score, but many individuals are unaware of them. To avoid further damage to your credit score, you should check it frequently, perhaps every quarter or six months.

You can directly check your credit score through credit agencies like Experian, Equifax, and TransUnion and CIBIL. In case of any issue related to credit score you can report to credit agencies so that they can investigate the issue.

To build a strong financial history and increase your chances of being approved for credit, regularly monitor your credit and try out the credit-building methods mentioned above.


What is the best way to build a credit score?

The best way to build a credit score is by making timely payments for your loan EMIs and credit card bills. Lenders who give you loans report how you make payments to credit bureaus every 30 days. As such, timely repayment is crucial to raising a credit score.

How long does it take to recover from a poor score?

There's no specific duration to raise a poor credit score to a good one. The time it takes to rebuild your credit score can vary depending on the issues that affect it. It could take a few months or years to achieve a desirable score.


Your credit score is a powerful reflection of your financial past, providing lenders with information on how responsible you've been in managing debt and making payments. This three-digit number unlocks countless possibilities for those who keep their score at par. However, building a credit score isn't a walk in the park. It could take months to reach a good number.

If you follow the methods above, you will effortlessly build a credit score without a credit card. Do not miss making payments since a few missed payments can harm your credit score.

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