How to Build Credit Without Credit Cards

Advertiser Disclosure

Last updated on August 24th, 2023

Credit cards provide one of the best ways to build credit quickly. Because of their ease of use, flexibility, and even rewards, credit cards offer a simple route towards building a good credit score. Not everyone can qualify for a credit card, however. Others may want to avoid the potential pitfalls that come from credit cards. So, how can those people build good credit? Here are some popular ways to build credit without using credit cards:

Self Credit Builder Loans

Self is a fintech lender that seeks to help consumers build credit without a credit card. The company provides this service through their popular Self Credit Builder Loans.

Credit builder loans work by moving approved loan funds into a separate bank account. This account is usually a CD (certificate of deposit). The person taking out the loan then makes payments against that CD for the loan term – the length of the loan agreement. Loan terms with Self typically run between six months and six years.

Once the entire loan balance is repaid (including interest), Self unlocks the CD account and returns the total money the borrower paid, minus any interest and administrative fees.

The primary benefit of credit builder loans, like Self Credit Builder Loans, is that the lender agrees to report payment history to the three major credit bureaus (Experian, Equifax, and Transunion). This process allows the borrower to build a positive credit history through timely payments.

According to Self, their credit building loan program is ideal for anyone, especially those new to credit, or with a FICO Score below 600. Self also allows Credit Builder Loan holders to open a secured credit card account after repaying at least $100 – the Self Visa® Credit Card.

Other Lenders

While Self is the biggest name in the credit builder loans marketplace, they aren’t the only lender to offer this service. Many banks and credit unions offer similar loans. Typically, larger banks, like Chase or Bank of America, do not provide these loans, but smaller institutions, like local credit unions, do.

The benefit of credit builder loans, regardless of the bank or lender, is that they usually feature low interest rates and easy repayment terms. These factors make them ideal for building credit and more accessible than some credit cards or personal loans.

Peer-to-Peer Lending

Peer-to-Peer lending is another common form of credit builder lending. A peer-to-peer (or P2P) service is a new type of lending where individuals with lower credit scores can secure loans for small amounts they usually wouldn’t qualify for.

There are dozens of reputable P2P lenders on the market, including prominent names like LendingClub. The benefit of these services is that people with bad credit or no credit can access lines of credit they usually wouldn’t have. Plus, P2P services remove the need to borrow money from friends or family.

However, the negatives of P2P loans are higher-than-average interest rates and fees that might not be present on other types of loans.

Student Loans

Many people can build a good credit score by repaying their existing loans – especially federal student loans. Federal student loan payments are reported to the three major credit bureaus, meaning the payment history of loans in your name will reflect on your FICO or VantageScore credit score.

While repaying student loans without a credit card won’t give you the type of credit mix many lenders like to see, it can help you build a positive credit history without the need for a credit card.

Experian Credit Boost

Experian Boost is a free service that helps raise a person’s credit score through additional reporting. The Experian Boost service is free to join and can add around 19 points to a person’s FICO Score for adding reoccurring payments not generally found on a person’s credit report, including:

  • Internet service provider bills
  • Mobile phone bills
  • Cable and other television bills
  • Utility bill payments (gas, water, electricity, etc.)

One of the most beneficial aspects of the Experian Boost service is that Experian does not look for negative payment histories. This means that Boost can’t hurt your credit score – only help it. Even better, the boost is instantaneous and there is no need to wait.

Other Options for Building Credit without Credit Cards

Other potential ways to build your credit score without using a credit card include:

  • Asking your landlord to report rent payments to credit bureaus
  • Get an auto loan and make timely payments
  • Become an authorized user on a parent or loved one’s credit card

While becoming an authorized user might seem like getting a credit card, it is possible to become a user on the person’s card and not use the credit card personally. Before becoming an authorized user, always discuss the situation, responsibility for payments, and all other considerations with the account holder.

Related Article: Experian Boost Adds Netflix to Credit Service

Featured image by Sarah Pflug / Burst

Editorial Disclosure – The opinions expressed on's reviews, articles, and all other content on or relating to the website are solely those of the content’s author(s). These opinions do not reflect those of any card issuer or financial institution, and editorial content on our site has not been reviewed or approved by these entities unless noted otherwise. Further, lists credit card offers that are frequently updated with information believed to be accurate to the best of our team's knowledge. However, please review the information provided directly by the credit card issuer or related financial institution for full details.

About: Cory Santos
Cory Santos

Cory is the senior credit card editor at BestCards, specializing in everything credit card-related. He’s worked extensively with credit cards and other personal finance topics, including nearly five years at BestCards. Cory’s extensive knowledge is an essential part of the BestCards experience, helping readers to live their best financial lives with up-to-date insights and comprehensive coverage of all facets of the credit card space, including market trends, rewards guides, credit advice, and comprehensive credit card reviews.

Advertiser Disclosure

BestCards is an independent, Florida-based credit card comparison platform. Many of the card offers that appear on this site are from companies from which BestCards receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). BestCards does not include all card companies or all card offers available in the marketplace.