If you don’t have enough cash to cover your entire life, chances are you’ll need a loan at some point. Whether you need a mortgage to buy a house, a car loan, or borrow money to start a business, good credit will help you get better interest rates.

But getting a good reputation isn’t always easy. When you have bad credit, it usually takes time and effort to fix it. At the same time, having no credit at all is almost a hindrance. Why? Because lenders are especially fickle when it comes to lending to people whose ability to repay has not yet been proven.

However, when it comes to credit, everyone starts with the same zero seal. While using your credit card responsibly is a great way to build or improve your credit score, it’s far from the only effective way.

Here are five ways to build your credit history and improve your score without a credit card:


Option #1: Get a small loan from your bank or savings bank

If you have a good relationship with a local bank or credit union, check with them first to see if you qualify for a small personal loan. When you do, you can borrow the money you need for the big purchase you want — or a small amount you know you can pay back over time.

Once you get a small installment loan, you should prioritize repayment. This type of loan may be the best way to help you build your credit or improve your credit score, but only if you make monthly payments on time, every time.

Option 2: Request to be an authorized user of someone

If you are a close friend of a reputable or good person, you can always ask them to add you as an authorized user to their account. If you do, your credit score will benefit from your monthly purchases and payments — even if you don’t do many transactions yourself.,

Remember, there are downsides too. If you become an authorized user and the account holder defaults for any reason, your credit could suffer a huge loss. Therefore, this strategy may be best for a family member or close friend you trust.

Option #3: Consider applying for government student loans

If you are a student, you can always consider applying for federal student loans. Since this type of loan does not require a credit check, you can get a loan without an established credit history.


Federal student loans are considered installment loans, so paying your bills in full and on time will also help you build your credit history over time. Just make sure you only borrow what you need – you know you can pay it back.

Option #4: Do Peer-to-Peer Lending

If you can’t borrow money from a bank or credit union, you can always try peer-to-peer lending through a P2P lending company like Prosper or Lending Club.

While these loans offer higher interest rates for borrowers with short credit histories or low credit scores, the fact that they report to the three major credit bureaus means making payments on time can improve your credit score over time. Just make sure you don’t borrow more than you need or waste money on unnecessary purchases.


Option #5: Submit the rent yourself

While paying rent to a private landlord will generally not improve your credit score, there are ways to get your rent credited each month. According to the credit bureau Experian, you should first contact your rental agency or landlord to see if they report rent payments to the three credit bureaus in a timely manner.

If not, you can sign up with a rent payment service that works with credit bureaus like Experian RentBureau. Other options include sites like ClearNow.com, RentTrack.com, or PayYourRent.com. These and similar sites process your rent payments electronically and report your payment history to three credit bureaus for an additional fee.

Gradually improve your credit rating
If you can get any of these options to work, you should be able to get a higher score in no time. Remember, it’s important to take the process seriously and pay all your bills on time each month — no matter what.

While it’s true that a lot of on-time payments can help you improve your score, it’s also true that only a few late payments can completely wipe out any progress you’ve made. When building your credit or improving your credit score, the last thing you need is to climb another mountain.


Jake Smith

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Jake Smith

He is the editor of Eragoncred. Previously, he was editor-in-chief of Eragoncred and a financial industry reporter. Jake has spent most of his career as a Digital Media journalist and has over 10 years of experience as a writer and editor.