Can You Build Credit Without a Card?

According to the CFPB’s June 2025 technical correction, in December 2020, 7.0 million U.S. adults (2.7%) were credit invisible, lacking sufficient data in their records to generate a credit score. For many, that invisibility stems from not using credit cards. But does avoiding credit cards mean avoiding credit entirely?

Not necessarily. While credit cards are one of the most visible tools for building credit, they’re not the only ones. This article explores how credit can be built—and even rebuilt—without a credit card, through less-known methods like rent reporting, loan alternatives, and newer data models.

Key Takeaways

Credit cards help—but aren’t required—to build credit.
Rent, utility, and subscription payments can sometimes count toward your score.
Some loans are designed specifically to help build credit history.
Alternative data models are gaining traction with lenders.
Not all lenders or scoring models use alternative data—so expectations should stay grounded.

Why Credit Cards Became the Default

Credit cards became central to U.S. credit scoring largely due to how traditional credit bureaus—Equifax, Experian, and TransUnion—collect and evaluate financial behavior. Payment history, credit utilization, and length of credit history are three of the biggest factors in a FICO score, and credit cards check all of those boxes.

However, that system has created a chicken-and-egg problem: getting approved for a credit card often requires a credit history, which some people don’t have. This dynamic has excluded many younger adults, immigrants, or people who previously relied on cash or debit.

Still, credit cards are just one way data gets into the system. And newer tools are expanding what "counts."

Rent and Bills: When Everyday Payments Start to Matter

Traditionally, paying rent or a phone bill on time didn’t help your credit—unless you missed a payment, in which case collections might hurt it. But that’s changing.

Some services now allow rent payments and utilities to be reported to credit bureaus. While not all scoring models include this data, some lenders do consider it. For renters, this can be especially helpful:

According to TransUnion, when rent payments were included in a consumer’s credit file, their credit score increased by an average of nearly 60 points.
Services like Experian Boost let users connect utility and streaming bills to improve credit reports.

These systems work best for people who already pay bills on time, but haven’t used traditional credit. However, it's important to note that not all credit scoring models incorporate this data—so the impact can vary.

Credit-Builder Loans: A Tool with a Twist

Hypothetical Scenario: Imagine a 22-year-old who’s never had a credit card but wants to establish credit for a future car loan. They open a $500 credit-builder loan through a community bank. Each monthly payment is reported to the credit bureaus. At the end of the loan term, they receive the $500—minus fees—and a new credit history.

That’s the core idea of a credit-builder loan: the money stays in an account while you pay into it. These are available through credit unions, online lenders, and some community banks. Timely payments help build credit without taking on traditional debt.

A similar approach involves secured loans or shared-secured loans, where a person borrows against their own savings and repays monthly.

Student Loans and Auto Loans Still Count

Many people don’t realize that federal student loans and some auto loans are reported to credit bureaus—even without any credit card activity. This means:

Making student loan payments on time contributes to your credit score.
Missing payments can hurt your score significantly.

It’s worth noting that installment loans (loans with fixed monthly payments and end dates) are viewed differently from revolving credit (like credit cards), but they still affect your credit mix and payment history.

Alternative Data Models: A New Frontier

Some lenders now use alternative credit scoring models that go beyond the big three bureaus. These models may include:

Bank account activity and cash flow
Employment history or income
Rent, phone, and utility payments

This is especially useful for individuals who don’t use credit cards or who are new to credit entirely. While not all lenders accept these models, their usage is growing—especially in fintech lending and buy-now-pay-later services. Still, investors should be aware that many traditional banks and underwriters continue to rely on FICO or VantageScore, which may not reflect these expanded data points.

So what? For someone without a credit card, these alternative scoring paths may open financial doors once closed off—but it's wise to verify how different lenders evaluate creditworthiness.

A Simpler Rule: Credit Building Is a Byproduct of Consistency

The most important driver of strong credit isn’t which tool you use—it’s how consistently you pay. Whether through loans, rent, or subscriptions, the formula is the same:

Make payments on time
Keep balances low (for any revolving accounts)
Avoid applying for too many accounts in a short time

Credit cards are common because they’re convenient and reward-based. But a person can still build a meaningful credit file by proving reliability through other means.

Building Credit Without Credit Cards — FAQs

Why do credit cards carry weight in most scoring models?

They affect payment history, utilization, and credit length—three of the largest factors in traditional scoring systems—making them central to how credit files are built.

Can rent payments improve a person’s credit file?

In some cases, yes. When rent payments are included, credit scores have shown increases of nearly 60 points on average, though not all scoring models use this data.

Do utilities or subscription bills contribute to credit scores?

Some services allow these payments to be reported, but the effect varies because many lenders still use models that do not incorporate this information.

How does a credit-builder loan help establish history?

Payments are reported to credit bureaus while the borrowed funds remain in an account. At term end, the borrower receives the funds, less fees, alongside new history.

What role do secured or shared-secured loans play?

These loans allow borrowing against existing savings. Timely repayment adds to credit history in a similar way to other installment loans.

Are federal student loans factored into credit scores?

Yes. Payments on federal student loans are reported. On-time payments support credit history, while missed payments may negatively impact scores.

Do auto loans establish credit without using a card?

Auto loans are installment loans reported to credit bureaus. Regular repayment supports credit history even if no revolving accounts are present.

What types of alternative data are sometimes used in newer models?

Alternative scoring systems may include rent, utilities, phone bills, bank account activity, cash flow, income, or employment history.

Are most lenders using alternative credit data today?

No. Some fintech and newer lenders adopt alternative models, but many banks continue to rely on traditional FICO or VantageScore systems.

How does payment consistency affect credit building?

Consistent on-time payments across loans, rent, or bills support positive records, while late or missed payments can have negative consequences.