How to Build Credit Without a Credit Card
5 Min Read | Published: May 23, 2025
This article contains general information and is not intended to provide information that is specific to American Express products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.
Explore alternative ways to build credit without using a traditional credit card, like credit builder loans, secured loans, and becoming an authorized user.
At-A-Glance
- Credit cards are an effective tool to build credit history, but they’re not the only option.
- Alternatives like using credit builder loans, reporting rent and utility bills, and becoming an authorized user on someone else’s credit card may also help you build your credit score.
- Regardless of the credit-building option you choose, it’s critical to understand the basics of your credit score and be sure to practice good credit habits.
Having a good credit score can open doors to financial opportunities. It may make it easier to rent an apartment in your preferred area, qualify for a better interest rate on your next car loan, or make it easier to secure a mortgage if you choose to buy a home. But if you have a limited credit history or none at all, it can be difficult to know where to start. While many people use credit cards to build credit, there are a number of other effective ways to build a solid credit history without opening a credit card. Here’s what you need to know.
Ways to Build Credit
There are several paths to build credit without a credit card, and the one you choose depends on your current financial situation and other circumstances.
- Use a Credit Builder Loan
A credit builder loan is one that may be available to you if you have limited or no credit history. If you’re approved for a credit builder loan, the lender moves the loan amount into a savings account or certificate of deposit (CD). Then, you begin to make regular monthly payments toward that loan, which are reported to the credit reporting bureaus like a regular installment loan. Once the loan amount is paid in full, the lender releases the loan balance to you. - Report Rent and Other Bills
Rent and other bills may not be reported to credit reporting bureaus. But there are third-party companies that can help ensure creditors are aware of timely payments for rent, utilities, phone bills, and even streaming services. Assuming you make these payments on time each month, paying for a third-party service to report them to credit bureaus may be worth considering to help build your credit history. - Look Into a Secured Loan
Secured loans use some kind of property or physical asset as collateral, could be house or a car. They may be easier to qualify for if you have a limited credit history since the bank can sell the property to recoup the loan if you’re unable to pay. Before you take on a secured loan, be sure you can afford the monthly payments and are comfortable with the interest rate offered. - Become an Authorized User
If you have a trustworthy close friend or family member who has a good credit score, you may benefit from being added as an authorized user on their credit card without having to get your own. Authorized users are secondary account holders who have access to spend money on an account but can be removed at any time by the primary account holder. Before you take this path, find a trusted partner, parent, or friend who has a good credit score and is willing to help you build good credit habits. - Practice Good Credit Habits
No matter which way you build credit, it’s critical to learn how your credit score is calculated and ways you can help improve your score. Research and understand basic concepts like credit utilization and interest rates to help inform your future financial habits.
Building Credit With a Credit Card
If you’re able to qualify for a credit card, it can be an effective path to building credit. Payments toward a traditional credit card are reported to the credit reporting bureaus and can help build your score. But keep in mind that any missed or late payments are also reported, which could have a negative impact on your score.
In addition to a traditional credit card, you could also consider building credit from scratch using a secured credit card. If you’re eligible for a secured credit card, you’ll pay an upfront deposit to open the card, which also acts as your credit limit. You can spend up to the limit on the credit card and then make payments that are reported to credit bureaus. After a period of time, lenders may review your payment history to determine if you’re eligible to convert the secured card to a traditional credit card.1
How Long Does It Take to Build Credit?
It may take around six months to establish credit history if you’ve never used credit before.2 It can take even longer to establish a good credit score. Once you have a credit score, it may fluctuate monthly depending on your credit habits. Positive activities like making timely payments or decreasing your credit utilization may help improve your score, but missing payments or not paying at least the minimum amount due could cause your score to drop.
After you’ve built a credit score, it’s important to monitor it on an ongoing basis. To do so, you may want to consider a tool that can help you view your credit score for free. American Express® MyCredit Guide is one such tool that helps you grow your credit knowledge with features that enable you to understand the specific factors impacting your score and predict how different financial decisions could impact your score in the future.
Frequently Asked Questions
If you’re not yet eligible for a credit card, you can consider alternatives that can help build your credit history, including secured credit cards, credit builder loans, secured loans, or becoming an authorized user on someone else’s credit card.
The Takeaway
There are a number of ways to build credit without a credit card, including taking out a secured credit card or credit-builder loan and making all loan payments on time. But if you’re eligible for and able to get a credit card, it might be the most effective and fastest way to build your credit history and score over time.
1 “How to Upgrade a Secured Credit Card to an Unsecured Card,” Experian
2 “How Do I Go About Building My Credit History?,” myFICO
Brooke Joly is a writer on a mission to unravel the mysteries of personal finance and make them accessible to the everyday reader. When she’s not behind the keyboard, you can find her enjoying the outdoors in Charleston, SC.
All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.
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