10 Ways to Improve Your Credit Score Without Getting a Credit Card

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Finance experts often recommend getting a credit card to improve your credit score. In some cases, that’s not such bad advice. Around 10% of your credit score is based on your credit mix, so having some revolving accounts can have a positive impact on your score. Additionally, opening a new credit card might lower your credit utilization, which can represent up to 30% of your score.

However, there are also plenty of reasons to avoid getting a new credit card. If you’re managing debt, adding a new credit account may not be a wise decision. Similarly, if you already have a few cards, increasing your borrowing power too much could work against you.

Fortunately, there are alternative ways to improve your credit score that don’t involve getting a credit card. If you want to work on boosting your score without opening that kind of account, check out 10 other options to explore.

1. Get a Consolidation Loan for Your Credit Card Debt

If you have credit card debt and your credit utilization ratio is high, getting a consolidation loan and using it to pay off those revolving balances could boost your score. It can take your credit utilization ratio down, which positively impacts your credit rating. Plus, it gives you a set path for paying off the debt because these kinds of loans aren’t revolving.

Just be aware that your credit score may dip a bit when you first get the loan. Along with adding a hard pull from the lender to your credit report, it can reduce the average age of your accounts — another credit-mix factor that influences your score. However, these losses are often short-term and may be fully offset by the change to your credit utilization.

2. Make On-Time Payments

If you’re comfortable with the slow-and-steady route, cultivating a history of on-time debt payments can work wonders when it comes to boosting your credit score. Consider setting up automatic payments to ensure you never miss your credit card bills’ due dates. Then, allocate money in your budget for those expenses to keep yourself from accidentally overspending and, subsequently, missing a payment due to a lack of funds.

3. Pay Down Your Revolving Debt

As mentioned above, your credit utilization ratio has a significant impact on your score. If you want to improve yours, reducing the amount you owe on revolving accounts is a wise decision. While it can be another slow-and-steady technique, it is effective. Plus, you don’t have to take on new debt to make it happen.

4. Become an Authorized User on Someone Else’s Card

Being an authorized user on another person’s credit card allows you to benefit from their good financial habits, such as making on-time payments. While it would technically let you to have a card associated with their account, you can choose not to take it. You aren’t required to use a card personally to get the benefits of being listed as a user.

Just keep in mind that the accountholder’s missteps will negatively impact your credit, too. So, only go this route if you trust that they’ll act responsibly.

5. Try a Credit-Builder Loan

If your credit score is lower because you don’t have much credit history — but you also aren’t necessarily keen on accruing debt — a credit-builder loan could be the answer. These work similarly to installment loans. However, instead of receiving a lump sum and paying the lender back over time, you send in payments that the lender sets aside in a savings-style account. Then, once you complete the full payment term, you receive the money you sent in back as a lump sum.

The benefit of this option is that most credit-builder loans report to all three major credit bureaus, so getting one can positively impact your score. Additionally, this process allows you to generate a small nest egg while building some credit history.

6. Request a Limit Increase on an Existing Credit Card

If you have a strong payment history on a credit card, have a solid income and are disciplined enough to not max out your credit card, requesting a limit increase on an existing account could boost your score. It’s simply another method for reducing your credit utilization, as you’ll have more available credit than you did before.

Do keep in mind that a hard credit pull might happen if you request a limit increase. Additionally, if this leads you to have too much credit, it could work against you in the future if you need other types of financing.

7. Take Out a Small Personal Loan

If you have little to no credit history, taking out a small personal loan from a bank or credit union where you have direct deposit could be a viable option. If your primary goal is to build some credit, not fund a large purchase, request the smallest amount possible through the program. Then, put the money in savings and use it to repay the loan over time, along with a little extra to cover the interest.

8. Try Experian Boost

While it’ll only impact your Experian credit score, Experian Boost is worth exploring. With this program, the bureau will factor in your financial actions beyond traditional debt accounts. For example, it can review your bank account to look for positive payment histories with utility companies and landlords, which don’t traditionally affect your credit score.

Experian Boost lets you benefit from good financial habits outside of the debt-repayment and -management landscape. Whether you have little credit or have had some credit difficulties in the past, it’s an option for getting a quick boost to one of your credit scores.

9. Explore Federal Student Loans

If you’re a student, a federal student loan could allow you to build some positive credit history. There’s no credit check involved, so your current score is irrelevant. Plus, it’s an installment loan with fixed terms, making it easier to predict.

Just be aware that it’s possible to borrow tens of thousands of dollars over the course of earning a degree, and it’s easy for the initial balance to get out of hand. You want to only borrow what’s absolutely necessary and genuinely affordable after you leave school.

10. Consider a Peer-to-Peer Loan

Peer-to-peer loans usually have less stringent requirements than some other forms of financing. If you have little credit, you may have an easier time qualifying. Additionally, you may be able to secure a loan even if your credit score isn’t high, depending on the platform.

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It’s important to note that interest rates can get high on peer-to-peer platforms, but they otherwise work like traditional installment loans. Just make sure you check your rates before moving forward so you can determine if it’s a smart move based on your current situation.

With these 10 alternatives, you can improve your credit score. Choose the option or options that work best for you and see how much your credit score can increase over time.

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