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Building credit without a credit card

Everyone got their FICO credit score start somewhere, so stress less if you are having trouble pinpointing where to begin. Just know that building good credit can be tricky, and often a slow job and not a sprint. Also, what takes years to build up in a credit score can be taken away almost twice as fast. 

Now that we have sufficiently snapped you into reality, let’s build you (and your potential credit score) back up with some sound advice for the cautious but ready credit score journey.

Is it Possible to Build Credit without a Credit Card?

Yes, it is. Credit cards are not the only means of establishing credit. Did you know that when you move out on your own and pay your bills on time, that counts towards a positive credit score? Make sure the utilities are in your name and paid in full at the conclusion of each billing cycle. Making payments on-time, and even scheduling automatic payments, shows that you are responsible and also have a dependable source of income.

To be clear, however: You will at some point need a credit card in your lifetime. It is very difficult to build overall credit without them since they are the most common form of credit issued. Even a gas card works on the same principle as a credit card, you will just start with a higher interest rate until you have proven you can make steady payments.

Second in importance and commonality to credit cards is a personal loan. NerdWallet provides some excellent details in a write-up similar to this one: “A credit-builder loan is exactly what it sounds like — its sole purpose is to help people build credit. Typically, the money you borrow is held by the lender in an account and not released to you until the loan is repaid. It’s a forced savings program of sorts, and your payments are reported to credit bureaus. These loans are most often offered by credit unions or community banks; at least one lender offers them online.”

How Can I Build My Credit Fast with No Credit?

Most major credit card companies will offer you a line of credit even when you don’t have any credit to begin with. This type of credit line typically has a small credit limit, usually under $1,000. Additionally, your interest rate might be slightly higher than someone with an average credit score. However, you can work toward future credit cards with higher credit limits and lower interest rates by using your first credit card responsibly. Use your credit card only for small purchases or necessities like groceries, and make sure to pay off the entire balance each month. 

Make sure you check your credit score frequently using online tools like Experian, CreditKarma, or More important than simply knowing your score is having all of your information up-to-date and accurate, including your total annual income.  

Here is some important information from US News, citing a quote from the founder of the finance websites Cash Money Life and The Military Wallet: “The most important way to build credit is to make all payments on time, every time,” US News continues: “He adds that more than one-third of your credit score is based entirely on your payment history and cautions that your score will suffer severely from missed or late payments.”

Credit score comparison
Have you tried these methods for building credit?

How Can I Build My Credit at 20?

When you are in college everything can seem to come at you fast. You may be living on your own for the first time, you may be setting up utilities for the first time, and you may be applying for credit cards while attending classes and working your first job around your class schedule. Just about everything in the previous sentence helps build credit. Your rent payment history, your utility payment history, and your first credit card all start establishing your credit profile behind-the-scenes while you focus on work and school.

If you live in an area like Southern California, the Bay Area, New York, etc, you may choose to live with your parents while you seek to get on your feet or get through college. While you are saving thousands of dollars per month on rent, it is also important to seek out ways to establish credit. Put your cellphone bill in your own name, apply for a credit card or gas card, or apply for a personal loan where you can be 100% confident the monthly payment is affordable for your lifestyle.

Speaking of due diligence, it would be a great start to plug your personal finances into a Budget Calculator so you can estimate how often you will need to use your first credit card, or what you can afford in a monthly personal loan payment scenario.

The Better Money Habits blog from Bank of America details some other common and effective options: “Some banks offer credit cards designed to help students establish credit, so look around for cards that are made for student use. Also, consider a checking account. While this won’t necessarily help you build credit, having a good relationship with a financial institution could help you get a loan down the line or even your first credit card.”

“You might also consider a secured card. With these cards, you make a security deposit in advance for the amount you want to borrow. This gives the bank collateral—something the lender can use should you not make your payments. Timely payments on a secured card can help you qualify for an unsecured credit card with a larger credit line.”


If you are holding off on starting with credit cards, having living utilities and cellphone bills in your name is a solid start. You can also take out a checking account with a bank and keep it in good standing, you can take out a personal loan that is easily affordable, and many creditors offer special deals catered for students. Get your finances in order and “on paper” so you are organized and know exactly what you are capable of building with your current income and finances. 


If you found our blog looking for financial advice or assistance with credit card debt relief or debt consolidation, call Golden Financial Services today at (866)-376-9846 or You can check out the rest of our blog here, and do your research on our services here. Let’s talk soon!

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