How to Build Credit Without a Credit Card

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Few tools are better at boosting your credit score than a credit card. Your payment history makes up about 35% to 40% of your credit score, so a few months’ worth of timely credit card payments can give you a major boost.

However, there are plenty of reasons why you might not want to add another credit card to your wallet. You might have had trouble managing your spending in the past. You might prefer using a debit card. Or you simply might not want another card cluttering up your wallet. Fortunately, there are plenty of ways to build credit without opening a credit card. 

We’ll show you a few different methods you can use to increase your score without a credit card and help you decide whether using a credit card to build credit is right for you. 

Building Credit: Establishing a Credit Profile

Building credit may seem like a complicated process, but the truth is, it’s a simple process once you understand how credit reporting companies calculate your score.

Credit scores come from companies called credit reporting bureaus. Your credit score tells banks and lenders at a glance how you use credit. Every month, credit reporting bureaus collect information on how you use credit and borrow money. They compile this data in a document called your credit report. The items on your credit report make up your credit score. 

Typically, your credit score is high if you have plenty of on-time payments and responsible credit usage. Missed payments, bankruptcy or maxed-out cards on your report typically result in a lower score. 

Credit cards aren’t the only types of credit. Loans, secured cards, a mortgage and even on-time rent payments can count as credit lines. You don’t need to have a credit card to build or improve your credit. All you need to do is make sure that you’re making payments on time and that your creditors report your payments.

Ways to Build Credit that Don’t Involve a Credit Card

Are you ready to start building credit? Let’s take a look at a few methods you can use to build credit without opening a credit card.  

1. Credit Builder Loans

A credit builder loan is a low-interest loan that you can use to increase your credit score. When you take out a credit builder loan, you get money now and you pay what you borrow back with interest over time. The bank or lender that issues your loan reports all of your payments to the credit reporting bureaus. This causes your score to rise over time as long as you make your payments on time every month.

Need an easy way to get a credit builder loan without a credit check? MoneyLion Credit Builder Plus members can get a $500 5.99% APR credit builder loan, with funds deposited into their account instantly — no credit check is required. They also get 0% APR Instacash cash advances.

Seventy percent of people who take out a credit builder loan from MoneyLion have seen their scores go up. MoneyLion also sets up automatic bill payments and reports your Credit Builder Plus loan payments to all three credit bureaus to help you build positive payment history with all three major credit agencies.

2. Become An Authorized User on Another’s Account

An easy way to build credit is by becoming an authorized user on another person’s account. If you have a friend or close family member who’s responsible with money, you can ask to become an authorized user on that person’s credit card. 

Authorized users can piggyback off the credit decisions that the primary cardholder makes. If the primary cardholder always pays his or her bills on time, these payments will show up on your credit report. You get credit even if you never use the credit card. This allows you to improve your score like you would with a credit card without actually having a card.

It can be risky to become an authorized user. The primary cardholder might miss a bill or start using too much credit, which can hurt your credit. Make sure you only become an authorized user with a card user you trust. Contact the credit card company beforehand and double-check that it reports activity for authorized users — not every company does. 

3. Get Credit For Your Rent

You probably pay at least one bill every month — your rent. Rental payments don’t show up on your credit report because most landlords don’t report your payment history. However, if your landlord does report your rent, credit reporting bureaus will use this information in your score calculation.

Talk to your landlord and ask if he or she will report your rent. Most landlords are more than willing to report your payments because doing so incentivizes you to pay your bill on schedule. If your landlord isn’t sure how to report your rental payments, you may want to consider signing up for a third-party rent reporting company. These companies allow you to pay your landlord online and then report your payments to the major credit reporting bureaus. 

4. Auto and Student Loans

Auto loan providers report your payments to the major credit reporting bureaus. You can increase your credit score by staying on top of your bills and making payments on time if you have an auto loan. You might have trouble getting an auto loan if your credit is bad, but keeping up with your current payments is an effective way to boost your score.

You can also improve your credit score by making payments on your student loans. Most federal student loans have a grace period after you graduate. If you’re still in your grace period, you can get a jump-start on your loans (and improve your credit score in the process) by starting your payments early. You’ll also pay less in interest over time.

5. Consider a Secured Credit Card

On the outset, a secured card might seem like just another type of credit card. However, a secured credit card involves putting down a deposit with your credit card provider. Your credit card provider holds onto your deposit and issues you a line of credit equal to the amount you paid.

For example, if you put down $400 to open a card, your credit card provider will give you a card with a $400 limit. From there, you can use your secured card in the same way you would use a regular credit card. 

Your credit card provider reports your monthly payments to the credit bureaus, which raises your score. Your credit card provider refunds your original deposit if you decide to close the card. 

A secured credit card might be right for you if you have bad credit or you haven’t yet begun to build credit. Secured credit cards can also be a great choice if you’ve had trouble with overspending on cards in the past because they have very low limits. 

Should You Get a Credit Card?

Using a credit card responsibly is an easy way to build credit quickly. However, credit cards aren’t for everyone. Let’s take a look at who can benefit from a credit card — and who shouldn’t open one.  

When You Should Get a Credit Card

  • You want a safe and convenient way to pay. Carrying a credit card is typically safer and easier than paying cash. If you lose your card, you can simply cancel it and report any fraudulent transactions.
  • You buy a lot of things online. Many online shops and stores only accept credit cards as a payment method.
  • You know you can manage your credit responsibly. Are you the type of person who’s always on time with your bills? If you are, you can benefit the most from the credit-boosting benefits of carrying plastic.
  • You want a simple way to track your spending. Credit cards electronically track and organize all of your purchases. A credit card offers a convenient way to catalog your spending.  
  • You travel often. In certain parts of the world, tourists can are often the targets of robbery. Carrying a credit card in lieu of a wad of cash is much safer.
  • You want to take advantage of the benefits. Some credit cards offer their members a ton of unique bonuses, from airline miles to cashback rewards. Very few debit card providers offer these rewards. 

When You Shouldn’t Get a Credit Card

  • You know you won’t make your payments on time. Are you constantly behind on your bills and forgetting your due dates? Missing credit card payments can quickly lower your credit score.
  • You’re prone to impulsive purchases. Swiping a credit card can feel like spending Monopoly money instead of your own hard-earned cash. If you know that you’ll use your credit card to finance luxuries you can’t afford, you might not want to get a card.
  • You’ve had trouble managing your credit in the past. Have you had trouble using your credit card responsibly in the past? Opening a new card might get you right back into debt.
  • You plan to use your credit card for emergencies. Using a credit card instead of building an emergency fund can leave you in debt if a sudden bill, fine or fee shows up. Avoid applying for a credit card out of financial desperation.
  • Your only card options have high interest rates. Do you have bad credit or no credit? You might still be able to get a credit card with a high interest rate. These high rates can make it much more difficult to pay back what you borrow, so you’re better off avoiding them.
  • You think a credit card is the only way to build credit. There are many ways to build credit without a credit card. If you only want to increase your credit score, consider a credit builder loan or secured card instead. 

Creating the Credit You Need

Creating the perfect credit score takes time, patience and a solid plan of action. Don’t despair if your score is low right now. There are plenty of methods you can use to reach the score you need to buy a home, go back to school or use credit to help you achieve your dreams. A proven credit-building program like the MoneyLion Credit Builder Plus membership is a great option.

Are you ready to get on the path to a better credit score? MoneyLion is here to get you on the road to the best score possible. Download the MoneyLion app from the Google Play or Apple App store to learn more.


MoneyLion Checking Account provided by, and MoneyLion Visa® Debit Card issued by, Lincoln Savings Bank, Member FDIC. Terms and conditions apply.

Investment advisory services provided by ML Wealth, LLC. Investment Accounts Are Not FDIC Insured • No Bank Guarantee • Investments May Lose Value. For important information and disclaimers relating to the MoneyLion Investment Account, see Investment Account FAQs and FORM ADV. Broker-Dealer may charge a $0.25 withdrawal fee, among other fees. Funded accounts are subject to administrative fee of $1 per quarter.

Current Credit Builder Plus membership required for Credit Builder Plus loan eligibility; the $19.99 monthly fee will be withdrawn from your linked bank account.  All loans with an Annual Percentage Rate of 5.99% are made by either exempt or state-licensed subsidiaries of MoneyLion Inc. The Credit Builder Plus loan may, at lender’s discretion, require a portion of the loan proceeds to be deposited into a reserve account managed by ML Wealth, LLC and held by Drivewealth LLC, member SIPC and FINRA. The funds in this account will be placed into a money market cash management or FDIC bank sweep vehicle, and may generate interest at prevailing market rates.  You will not be able to access the portion of your loan proceeds held in the credit reserve account until you have paid off your loan, and so long as your Credit Builder Plus membership payments are current. If you default on your loan, your credit reserve account may be liquidated by the lender to partially or fully satisfy your outstanding indebtedness. May not be available in all states.Credit Reserve Accounts Are Not FDIC Insured • No Bank Guarantee • Investments May Lose Value. For important information and disclaimers relating to the MoneyLion Credit Reserve Account, see Investment Account FAQs and FORM ADV.

A Credit Builder Plus loan may or may not improve your credit score. Credit scores are the result of your personal credit practices.

Cash advance requires current membership in Credit Builder Plus ($19.99 monthly fee) or Instacash with Banking ($9.99 monthly fee) membership programs. Instacash with Banking monthly fee is waived for members who connect and maintain recurring eligible direct deposits into their MoneyLion Checking Accounts. All Credit Builder Plus and Instacash with Banking members are automatically eligible to access either $25 or $50 of cash advance, depending on creditworthiness.  Members can increase their cash advance limit to up to $250 by connecting and maintaining recurring eligible direct deposits into their MoneyLion Checking Accounts and after up to three consecutive direct deposits have cleared, or at MoneyLion’s discretion. See Membership Agreement and Cash Advance FAQs for more information.

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