3 Ways to Build Credit Without a Credit Card

You don’t need a credit card to boost your credit score. Here are some other avenues you might take.

Whether you’re applying for a mortgage, looking to rent an apartment, or shopping around for an auto loan, there’s one number that will dictate whether or not you’re approved: your credit score. That’s why you want your credit to be as strong as possible, and a good way to get there is to open a credit card.

How do credit cards help credit scores? For one thing, if you pay yours on time every month, you’ll boost your payment history, which is the most critical of five factors that go into determining your score. Having a credit card can also help bring down your credit utilization ratio, which is the second most important component of your score.

But while credit cards can help your credit, they can also open the door to uncontrolled spending. Case in point: As of late 2016, the average American household was carrying about $16,000 in credit card debt. Therefore, if you can’t trust yourself to use a credit card responsibly, you’re better off not opening one and building credit another way. Here are some options in that regard.

1. Pay your bills on time

We all have bills that come up on a monthly basis, whether it’s your electric bill, your cable bill, or your student loan bill. As stated above, credit cards can help boost your payment history when you pay them on time consistently — but you can achieve the same results by paying your regular bills on time. So take a look at your various expenses and when they’re due, and set up a series of calendar reminders to ensure that you never miss a payment. Another option? Sign up for autopay, which either your bank or your individual billers will generally allow for.

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