How to Build Credit Without a Credit Card

Don't have a credit card? No problem. While 82% of American adults used credit cards in 2023, there are plenty of other ways to build your credit history.

1. Try KOHO’s credit builder loan

• KOHO reports your payments to credit bureaus

• You can't overspend since it's not a traditional credit card

• The app helps you track spending and pay bills on time

• No credit check needed to start

2. Become an authorized user

Ask a trusted family member to add you as an authorized user on their credit card. Their payment history will show up on your credit report, even if you never touch the card.

Just choose wisely—their late payments will hurt your score too.

Loans typically range from $300 to $1,000, and you'll pay some fees for this service.

3. Finance a car

Auto loans are often easier to get than other loans because the car serves as collateral. Make your payments on time, and your credit score will benefit.

4. Get a secured credit card

These require a deposit (usually $200-$500) that becomes your credit limit. After several months of responsible use, you might qualify for a regular credit card.

5. Keep up with existing loans

Already have student loans? Making on-time payments helps your credit score. Consider consolidating debts if it makes payments more manageable.

6. Add rent payments to your report

Ask if your landlord reports to credit bureaus. If not, use a third-party service to add your rent history to your credit report.

KOHO offers a rent reporting feature. Turn your rent into a credit building opportunity. Get tenant insurance and earn cash back on your rent payments.

What to avoid

• Late payments (these make up 35% of your score)

• Closing old accounts

• Using too much of your available credit

• Applying for multiple new accounts at once

Building good credit takes time, but it's worth it. Once your score improves, you'll have more options—including better credit cards if you eventually decide you want one.

Final thoughts

There are plenty of ways to build credit without using credit cards. Try becoming an authorized user, getting a credit builder loan, or adding your rent payments to your credit report. The important thing is making payments on time, keeping old accounts open, and not applying for too much credit at once.

As your credit score grows, you might want a credit card later. But for now, these alternatives can help you build a solid credit foundation without the temptation of a plastic card.