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4 Ways to Build or Rebuild Credit Without a Credit Card

You may feel your credit score has nothing to do with your ability to do a certain job. But the truth of the matter is, many employers use credit scores and credit history to determine whether an applicant is the best person for a position. This isn’t the best news if you’ve made some credit mistakes in the past, or if you don’t have a credit history. However, if your credit needs work; building or rebuilding credit may help you qualify for some positions.

Getting a credit card is one of the best ways to build or rebuild a credit history. But if you prefer not to use credit due to fear of debt, there are ways to build credit without a credit card. 

1. Report rent payment to the bureaus

If you own a house, your mortgage lender already updates your credit report monthly. So, as long as you’re making timely payments, you’ll slowly improve your credit score. But if you don’t own and looking for ways to improve or establish credit, a positive rental history can help. Typically, rent payments do not appear on credit reports — unless you’re in breach of contract. However, it’s possible for landlords to report rental history. Speak with your leasing manager and ask if the company can report your monthly activity. Management may not comply with your request, but it’s worth a shot. For each month you make a timely rent payment, you’ll build a good credit history. 

2. Get a utility bill in your name

Just like rent payments, utility payments do not appear on credit reports, unless you don’t pay and the account goes to collection. The same way some landlords willingly report rent payments, some utility companies will do the same, but you have to ask. A friend approached her energy and phone company to ask for regular updates and the companies happily agreed. For this to work, the utility bill must be in your name. 

3. Open a bank account

Opening a bank account doesn’t help your credit score, but it can improve your chances of qualifying for a personal loan with the bank. Getting a loan and making timely payments is a surefire way to build or rebuild credit. Banks regularly report loan activity to the bureaus, and if you have an account and a good relationship with the bank, there’s the opportunity to get a small loan. You may be able to use funds in savings or other personal property as collateral. Apply for a $1,000 small loan and pay back funds over the next year. The more positive activity on your credit report, the better your score. 

4. Check your credit report for errors

If you have a low credit score, start repairing your credit by pulling your credit reports from AnnualCreditReport.com. Check each report for mistakes. You might be surprised to learn how one inaccuracy can ruin your credit score. A collection account or a judgment may appear on your credit report in error, and this is more common than you think, especially if you have a common name like Jane Smith or John Williams. If you discover someone’s negative information on your credit file, file a dispute with the bureaus to correct your reports. 

Don’t underestimate the importance of a good credit score. Even if you don’t plan to buy a house or a car in the near future, good credit might work to your advantage when applying for work. 

Photo credit: Flickr

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