Improve Your Credit Score without Using Credit Cards

Some links below are from our sponsors. Here’s how we make money.

Advertiser Disclosure: Opinions, reviews, analyses & recommendations are the author’s alone. This article may contain links from our advertisers. For more information, please see our Advertising Policy.

default sharing image
It’s true that the fastest way to build credit is to use a credit card. However, many people prefer not to use credit cards. Even if you don’t want to use credit cards, though, your Fico credit score is important. Mortgages and car loans require that you have good credit if you want the best…

It’s true that the fastest way to build credit is to use a credit card. However, many people prefer not to use credit cards. Even if you don’t want to use credit cards, though, your Fico credit score is important. Mortgages and car loans require that you have good credit if you want the best rates.

Build Credit Without Credit Cards
You don’t need a credit card to build credit

On top of that, there are a number of other financial service providers that want to know your credit score. Satellite and cable TV providers often ask to run your credit to determine whether or not you need to provide a security deposit. Insurers often check your credit to determine your premiums. While employers aren’t supposed to check your credit score, they can check your report.

You want your credit report to show your finances in the best light, and you want your credit score to reflect your good habits as well. But, if you don’t use credit cards, how can you build a credit history that speaks well of you?

Alternative Credit Reporting

The increased interest in building credit without credit cards, and proving good payment records without the need for high interest debt, has prompted the development of some alternative methods of credit reporting.

Even FICO, the company that created the credit score and is considered the foremost authority in such matters, has developed an alternative score, which it calls the Expansion Score. This score takes into account your bank account activity, as well as your utility payments, rent payments and your purchase plans. However, you have to request that companies report on this information, and you should be aware that negative information is, of course, recorded along with the positive information.

The credit agency PRBC uses the Expansion Score as part of its service to provide a consumer credit report that includes “non-traditional” information. You submit your information and pay a fee to have it verified, and those you make payments to report your history. On top of that, the major credit bureau Experian is adding rent payment history to its scoring model in some instances.

Other Strategies for Improving Your Credit Score

In addition to working with alternative credit bureaus and scoring methods, you can also take other steps to improve your credit — without a credit card. For the most part it’s fairly basic:

  • Avoid missing payments: Even if you aren’t using an alternative credit bureau method of reporting, a missed payment on a non-credit account can be reported, and impact your credit score. Stay current on all your payments to avoid dings to your credit.
  • Fix errors on your credit report: Since your credit score is based on the information in your credit report, wrong information can mean a lower score. Different credit scoring systems may use different information so you should review your credit report, and fix errors so that your financial history is accurately portrayed.
  • Get an installment loan: A personal loan, auto loan or student loan can be used to help you build credit. Interest rates are usually lower than those on credit cards, and your on-time payments will help you build credit without the need for credit cards.

With some planning, and some creativity, it’s possible for you to show that you are financially responsible without the need for credit cards — as long as you can convince those you do business with to use alternative methods of reporting.

Related Post: What is Credit Repair


Get Instant Access
FREE Weekly Updates! Enter your information to join our mailing list.

Posted In:

About Miranda Marquit

Miranda Marquit is a freelance writer and professional blogger. She has contributed to, and been mentioned by, numerous financial web sites, including USA Today, The Huffington Post, The San Francisco Chronicle, The New York Times, Consumerist, The Atlantic Wire, The Wall Street Journal, The Washington Post, and other publications.

Her blog is Miranda Marquit.

Reader Interactions


    Leave A Comment:


    About the comments on this site:

    These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

  1. Kurt says

    The pressures to get a credit card account are substantial. And why not–issuing credit cards is an incredibly lucrative business, and improving your credit score can save money, even if you never take out a loan!

    If you do decide to get a credit card solely to boost your credit score, insist on a low credit limit, say $500. And ignore the inevitable and patronizing offers you’ll get to boost your credit limit once you have the account.


    • Mike says

      If you are going to bother with a card and have any discipline, make it a LARGE credit line. And get two or three. For most models, your score is heavily determined by the NUMBER of accounts, and seriously impacted by the % of credit used. Even a small balance reported on a $500 line can whack you, but 2 or 3 hundred each on three cards with 5K lines will make you look super.

  2. MyMoneyDesign says

    Interesting post, Miranda. I had no idea there was such a thing as an Expansion Score. It’s about time I got credit for making sure all my other bills are paid on time!

    Unfortunately, sometimes you’ve got to pay to play. As this post points out, you can get other loans besides a credit card to help build your history, but they won’t be as good of offers as someone who has already proven their worthiness with an established credit history (likely through the use of a credit card). I know some people hate them, but having a credit card is not like owning a piece of the devil. I’ve had one since I was 18 and I have never paid a penny interest, fees, or any other charges. You just have to stay disciplined and use some common sense.

    Kurt makes a great point that you could get into the game soft by artificially keeping your limit low so you intentionally stay out of trouble.

  3. Jeff Crews says

    I vary rarely use my credit card. Although I probably miss out sometimes; because I could pay off the balance while collecting rewards. Still, I am just more comfortable in making my payments regularly and never buying anything on credit.

  4. Mae Quicho says

    I recently was requesting a credit company from a store to increase my credit limit a bit when they started bombarding me with questions I never heard before from other credit companies. So, before they even start anything yet – I told them to forget it and that I don’t want any credit increase at all. But after a few days, I received a mail and it was from that credit company saying that they increased my credit limit. I don’t want it and I don’t need it at all. Will it affect my credit score if I cancel the said increase? Why did they issue me an increase when I told them to forget about the call on that day. Thank you.

Disclaimer: The content on this site is for informational and entertainment purposes only and is not professional financial advice. References to third party products, rates, and offers may change without notice. Please visit the referenced site for current information. We may receive compensation through affiliate or advertising relationships from products mentioned on this site. However, we do not accept compensation for positive reviews; all reviews on this site represent the opinions of the author. Privacy Policy

Editorial Disclosure: This content is not provided or commissioned by the bank advertiser. Opinions expressed here are author’s alone, not those of the bank advertiser, and have not been reviewed, approved or otherwise endorsed by the bank advertiser. This site may be compensated through the bank advertiser Affiliate Program.