5 Ways to Build Your Credit Without a Credit Card


This is a guest post by Shiv Nanda.

Most people have the misconception that putting all the expenses on credit cards is the only way to build credit. Agreed that making timely payments on credit cards is the most common way to prove you’re fiscally responsible, but it’s not the only way. There are other less-risky options available to build your credit score.

If you are looking for more ways of building your credit without a credit card, you have come to the right place. This page gives you 5 options to get you started:

1. Authorized User Status

Ask your family member or a close friend with a credit card to make you an authorized user. As an authorized user, you can piggyback on the primary cardholder’s credit card activity. Even if you decide not to use the credit card, your card activity may be reported to the credit bureau and that can help you build your credit score.

However, this method can backfire, if you or the primary cardholder racks up excessive balance or misses payments. This could end up damaging yours and the primary cardholder’s credit score. Therefore, it’s important to trust each other and use the card responsibly.

2. Auto Loans


An auto loan is a good way to build and improve your credit score. So, how to improve credit score with a car loan? You can begin to build a positive payment history just by making timely payments.

3. Personal Loans

Unsecured personal loans are another way to build your credit without credit cards. Personal loans allow you to borrow a fixed amount of money and pay this amount in monthly instalments.

4. Peer-to-Peer Loans

Peer-to-peer (P2P) loan is one of the newest ways to build your credit without a credit card. So, with a peer-to-peer loan, you have more cash flow with a lower interest rate and that allows you to have the better financial flexibility to pay your debts and financial obligations responsibly.

5. Get a Personal Line of Credit


How to build credit with a personal line of credit? A personal line of credit is a form of revolving credit, similar to a credit card account. The lender approves a credit limit and you are authorized to borrow money against this approved credit limit and repay in variable amounts over time. But, the major difference is in the interest rate. The interest rate of a credit line is much lower than that of a credit card.

Tips to Build a Great Credit History


  • Stick to your payment schedule. Pay on time, every time. Late or missed payments affect your credit score severely.
  • Don’t max out the credit available to you. Utilizing your credit to its maximum gives out a signal to your lender that you are facing financial trouble. That’s not a good sign. So, the less credit you tap into, the better is your credit score.
  • Don’t apply for too many loans at one time. These applications will register as hard inquiries with the credit bureau, thus hampering your credit score.
  • Have a healthy mix of credit accounts. Having a mix of revolving loans, instalment loans, secured and unsecured loans, improves your credit profile and hence your credit score.
  • Establish a lengthy history. Having a long history of credit accounts, which are in good standing definitely gives a boost to your credit score.


Shiv Nanda is a financial analyst who currently lives in Bangalore (refusing to acknowledge the name change) and works with MoneyTap, India’s first app-based credit-line. Shiv is a true finance geek, and his friends love that. They always rely on him for advice on their investment choices, budgeting skills, personal financial matters and when they want to get a loan. He has made it his life’s mission to help and educate people on various financial topics, so email him your questions at shiv@moneytap.com.

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