How to improve your credit score without a credit card

Credit Building

When it comes to improving your credit, you may have heard that an effective way of doing this is by using a credit card. By carefully managing your credit limit, and ensuring that your payments are always on time, you can certainly see your score head in the right direction. What about those who are looking for a way to increase credit score without credit card?

It could be that your current credit score is a little on the low side to allow you access to a credit card. Even though there are cards that are designed to help people build their credit, these still have their restrictions and there is no guarantee of acceptance. Then there are people who just don’t want to go the road of having a credit card. Are these people destined to a life without credit? Of course not! Here’s a look at how to improve credit score without credit card as well as considering why some people just want to avoid them.


Why wouldn’t you want a credit card?

Even if a credit card seems the perfect solution to improving your credit score, some people would rather avoid them. Some of the issues that people have with using these are:

High interest rates

There may be offers where you can take advantage of interest-free periods, but generally, you will be paying interest on your credit card balance. The rates offered can vary greatly depending on the provider as well as your credit file. Some people just find the interest rates too much of a turn-off.

Difficulty budgeting

It could be that people aren’t the best when it comes to budgeting. Although this is something that everyone needs to master at some point if you find this a struggle it may be wise to avoid a credit card. Once you have developed this skill you could perhaps reconsider. 

Temptation to use too much of the available credit

Lenders are not big fans of people using all of the credit that is available to them. If you are looking to use a credit card to improve your credit, you could actually do more harm than good by maxing out your card. If the temptation is too much, then trying to build credit without credit card makes much more sense.

The risk of slipping into debt

To make best use of a credit card then you need to ensure that you are disciplined. Knowing that you have a card there with a certain amount of credit can prove overly tempting for some people. Using a credit card for treats, or even to meet basic living expenses, can see your debt spiral out of control. Not only does that cause immediate issues but it is also detrimental to long-term financial health.


The credit card alternatives

Whether you have had an application rejected or just decided that a credit card isn’t a good fit for you, you still face the same issue: how to increase your credit score without credit card. Here’s our round-up of the options that are available:

Credit builder loans

When looking for ways to boost your credit score without credit card, these loans can be a viable alternative. They work by allowing you to save money over, what is usually, a 12 month period. At the start of the term, you let the company know what you can afford to save each month. If you said that you could comfortably afford £20 each month, the company will then lock away £240 for you.

You make your payment of £20 each month until you have paid the entire £240. Once you have done this, the £240 that was locked away is then released to you. Each payment is recorded to credit reference agencies and at the end of 12 months, it will be reported that you have completed your loan. Sounds great, right? However, there are a few potential downsides:

  • Lenders can’t see that the loan was taken to build credit. It could in fact be viewed negatively 
  • Missed payments will also be reported and could damage your credit file
  • Payments are not always reported to all three credit reference agencies 

Rent and bills

While mortgage holders have long seen their credit score benefit from their monthly payments, tenants have not always been afforded that luxury. The great news is that there is now a great option via CreditLadder which can see rent payments reported to credit reference agencies in the same way that mortgage payments are.

Bills are also an alternative way to improve credit score without credit card. The likes of mobile phone contracts and utility bills will report to reference agencies. Managing your accounts well can bring you a welcome boost. Again, there are a handful of potential issues to beware of:

  • CreditLadder reports to 2 (max) credit reference agencies - not all 3
  • Not all bills are reported


Wollit Credit Builder 

If you are looking for the best way to build credit without a credit card then what we offer at Wollit is the perfect solution. The Wollit app allows you to start using our credit building service after signing up, which only takes a few minutes. By subscribing at a cost of £6 per month, we will report your monthly payments to all 3 UK credit reference agencies.

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