How to Build Credit Without a Credit Card
Introduction
Think you need a credit card to build credit? Think again. In 2025, more Americans—especially Gen Z—are avoiding traditional credit. But your credit score still matters for renting apartments, getting loans, or even landing a job. Here's how to build a strong credit profile without swiping plastic.
1. Report Rent Payments
Services like RentTrack and Experian Boost allow your on-time rent payments to be added to your credit report. A 2025 report by TransUnion found that renters using such services saw an average score increase of 29 points within six months.
2. Use Credit Builder Loans
These small loans—offered by credit unions and fintechs like Self—hold your loan funds in a secured account until you’ve paid it off. They help establish payment history without requiring existing credit. As mentioned in our post on how to fix credit report errors, payment history is the #1 factor in your credit score.
3. Become an Authorized User
If you have a family member with good credit, ask to be added as an authorized user on their card. You don’t need to use the card—just being listed can improve your score, as their credit behavior reflects on your report.
4. Use "Buy Now, Pay Later"—Responsibly
Some BNPL services like Affirm and Klarna now report payments to credit bureaus. But be cautious: missed payments can hurt your score. Treat it like a real loan and always pay on time.
5. Avoid Common Mistakes
- Don’t open store cards you won’t use
- Avoid hard inquiries for loans you may not qualify for
- Monitor your credit regularly using free tools like Credit Karma or Experian
Final Thoughts
You don’t need a credit card to build credit—but you do need consistency. In 2025, alternative credit-building tools are more accessible than ever. Choose one or two methods, stick to your payments, and track your progress. Small steps now can make a big financial difference later.
Published by financewisedaily
