How to Build Credit Without a Credit Card


LevelCredit LevelCredit


17 March 2020

Knowing how to build a positive credit score is a crucial life skill.

We need good credit to do a range of important things, from getting a cellphone contract to buying a house. 

Regularly using and then paying off a credit card is one of the most reliable ways to build credit. However, credit cards aren’t an option for everyone. Sometimes, events in your credit history can make it harder to get hold of one. Some people simply don’t like them. Whatever the reason, the question of how to build credit without a credit card is an important one. Here are some tips:


Work with a Certified Data Furnisher to Report Your Rent and Utility Payments

Rent is the largest monthly expense for more than 25% of Americans. Over 60% of under-35s are renters. However, fewer than 1% of Americans see their positive rental payment history in their credit files. 

LevelCredit has worked on rent reporting for years, and we’ve got it down to a fine art.  LevelCredit users improve their credit scores by an average of 29 points in just two months, with subprime users seeing 51 point average increases. 

And, we can also report your payments for your utilities: water, electricity, and more. We can connect your rental and utility payments directly to your credit file, and unlock one of the easiest ways to build credit without a credit card.


Unlock Other Kinds of Alternative Credit Data

“Alternative credit data” refers to forms of credit data that aren’t typically included in traditional credit reports. There are a variety of forms of alternative credit data, including:

  • Money management markers such as how long bank accounts have been open, frequency of withdrawals and deposits, and amount of savings.
  • Property and asset records, including the value of owned assets.
  • Alternative lending payments such as payday loans, instalment loans, rent-to-own payments, buy-here-pay-here auto loans, and auto title loans.
  • Demand deposit account (DDA) information, including recurring payroll deposits and payments, average balance, etc.

One of the most powerful sources of alternative credit data is rent and utilities reporting. Rent reporting is the logging of monthly rent and utilities payments with credit bureaus as evidence of creditworthiness. 

As a powerful API for alternative credit data, a service like LevelCredit can empower your monthly bills to boost your credit. On average, residents who report their data with LevelCredit see their credit scores increase by an average of 29 points after just two months.

Keep an Eye on Your Loan Payment History

A simple way to build credit without a credit card is to take out a loan. Go for a lender that reports to at least one of the three major credit bureaus: Experian, TransUnion, or Equifax. Your loan payment history automatically shows up on your credit report, and managing this will help you build your credit score. Some loans are more difficult to get than others, so it helps to know your options. Above all: make all your repayments in full and on time. 

Use a Credit-Builder Loan

A credit-builder loan is a special kind of loan. When you successfully apply for one, the lender places your loan balance in a savings account. You make fixed payments over a few months, and at the end of the loan term, you receive the total balance. With a credit-builder loan, you are saving money and building credit at the same time.

How does this help with your credit score? The payment history is included in your credit report. As long as you make all your monthly payments on time, your payments will boost your credit score.


Manage Your Student Loans

Start your post-grad life with your best foot forward. Make sure you repay your student loans, as they are a critical part of your credit history. Although you don't have to pay anything while you're still in school, there's usually only a six-month grace period after graduation before you have to start paying off your student loans. You could easily miss that first payment and damage your credit score right out the gates if you're not careful. 


Repay your Mortgage or Car Loan payments

Both mortgages and car loan providers report to credit bureaus. It will be quite a hurdle to get approved for either of these without an established credit history. But with a steady income and a good downpayment, your chances of getting approved may increase.  

For mortgages, paying on time matters. You can get a loan backed by the Federal Housing Administration if you have at least one year of punctual, timely rental payments, including your other bills, and if you have no accounts in collection other than medical bills.



Using credit cards isn’t the only thing that determines your creditworthiness. By learning how to build credit without a credit card, you are opening up financial windows of opportunity for yourself, so make sure to do all you can to develop these financial healthy habits. Read our blog to give yourself a crash course on building credit scores.