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4 Ways You Can Build Credit Without a Credit Card or Loan

Most people believe the only way you can build credit is by getting a credit card or a loan. But how can you build credit if you can’t get approved for a credit card or a loan? Don’t worry, there are plenty of viable alternatives you can take advantage of to build your credit without getting a loan or a credit card.


The CFSI estimates there are 108 million Americans whose credit score, or lack thereof, prevents them from accessing affordable, high-quality credit when they need it.[1]


Why is credit important? Unless you have the means to pay cash for everything, there will be a time when you will need to borrow in order to get something you need now. In short, credit is the power to borrow money. Having access to credit allows you the flexibility to get something today like an apartment, an auto loan, a mortgage, a personal loan, a credit card, and pay for it over time. Working to improve your credit ensures you will qualify for financial products when you need them.

Here are just four ways you can build credit without a credit card or loan:

Apply for a secured credit card: A secured credit card requires a cash deposit that acts as collateral for the credit limit. This can be a good option for building credit if you have a hard time getting approved for a traditional credit card.

Become an authorized user on someone else's credit card: If you have a friend or family member with a good credit history who is willing to add you as an authorized user on their credit card, you can build credit by using the card and paying the bills on time.

Take out a credit builder loan: A credit builder loan is a small loan that is designed specifically for the purpose of helping you build credit. With this type of loan, the lender holds onto the loan funds while you pay the loan off, once the loan has been paid, the funds are released to you.

Use a credit-building smartphone app: There are several smartphone apps that can help you build credit by reporting your on-time bill payments to the credit bureaus. Some of these apps allow you to link your utility, telecom, and other monthly bills to the app, and they will report your payments to the credit bureaus as long as you pay your bills on time.

Our Credit Builder Resources page provides options that are intended to help consumers with low or no credit scores establish and build their credit.

It's important to keep in mind that building credit takes time and requires a consistent track record of making on-time payments. It's also a good idea to monitor your credit regularly to ensure that your credit reports are accurate and up to date.


About the Author

Jeff Boe is a graduate of National American University, a Board-Certified Credit Consultant, President of Boe Credit Consulting, and Executive Director of the Willard and Margaret Boe Financial Literacy Project. He is a credit expert who has successfully rehabilitated his own credit profile and, since 2005, has been working with consumers to improve their own credit files and their financial literacy.

In 2018 he started Boe Credit Consulting in order to help even more consumers improve their financial literacy and to help them eliminate the financial burden of negative credit.

For more information, visit

©2020 Boe Credit Consulting / Willard and Margaret Boe Financial Literacy Project


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