Sara Routhier, Managing Editor and Outreach Director, has professional experience as an educator, SEO specialist, and content marketer. She has over five years of experience in the insurance industry. As a researcher, data nerd, writer, and editor she strives to curate educational, enlightening articles that provide you with the must-know facts and best-kept secrets within the overwhelming world o...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florida. ...

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Reviewed by Joel Ohman
Founder, CFP® Joel Ohman

UPDATED: May 10, 2021

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  • The fastest way to build credit is with a secured credit card
  • Paying off student loans on time and in full is the first way many young adults build credit
  • Many banks and credit unions offer credit-builder loans for young people to build credit

In this fast-paced, busy world, building and maintaining a good credit score is extremely important for your financial well-being.

A good credit score is necessary in order to qualify for a mortgage loan, an auto loan, and even to apply for a credit card.

But if you’re a young person just in the process of becoming financially independent, you may be wondering how to build credit without a credit card.

It may seem daunting to start building credit, but stick with us and we’ll show you how to build credit without a credit card and how to build credit fast so that you can start applying for loans for the house and car of your dreams.

But before you continue, enter your ZIP code into our free comparison tool above to find affordable loans from lenders in your area.

How do I build credit without a credit card?

If you’re a young person without a credit card, you’re probably wondering how to build credit without a credit card. It seems like an oxymoron right?

After all, in order to qualify for a credit card in the first place, you usually have to have an established credit history. But how can you do that without a credit card?

Well, the goods news is there are ways to build credit without a credit card. For example, if you’re a recently graduated college student you likely have some student loans to pay off.

If you make sure to make your student loan payments on time and in full, this will help establish a credit history. For many young adults, this is the first chance they have to start improving their credit scores.

Another option is getting credit for paying your bills on time and in full. Credit reporting companies like Experian may allow you to use a rent-reporting service to take a bill you are already paying and have it reflected on your credit report.

In this way, paying your phone bill and utilities on time and in full helps build your credit score, bringing you one step closer to qualifying for that credit card or a new loan.

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How do I build credit fast?

The steps we mentioned above are great, but they take time. If you’re desperate to get approved for that mortgage loan for your dream home, you’re probably wondering how to build credit fast.

Well, the fastest way to build credit is with a credit card. But since you may not have one yet, the next best thing is to get a secured credit card.

A secured credit card works much like an unsecured credit card except it requires a cash deposit up front, usually a minimum of $200. The deposit is then held in a bank account which you then withdraw from.

You can’t take out more than the deposit is worth and you’ll be charged interest if you don’t make your payments on time. Keeping up with this secured credit card account will help you build credit fast until you qualify for an unsecured credit card.

Another option is to get a credit-builder loan or a secured loan. Unlike a standard loan, the funds won’t be available to you right away. Instead, the bank will hold the loan amount in an account while you make payments.

Once you pay back the loan fully, you’ll have access to the funds. This allows you to build savings and build credit at the same time so that you can qualify for a mortgage loan, auto loan, or a credit card in the future.

And finally, ask your parent or guardian if they will make you an authorized user on their existing credit card. This will add the card’s payment history to your credit files so that you can start building credit.

Of course, make sure the primary user has a good history of making their payments on time before you try this. If not, they could end up bringing your credit score down with theirs.

Well, now you know how to build credit without a credit card. Before you go, enter your ZIP code into our free comparison tool below to find affordable loans from lenders in your area today.