5 Fastest Ways to Raise Your Credit Score Without a Credit Card

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One of the most popular ways to build and improve your credit is with a credit card, mainly by making payments on time and establishing a good track record. But not everyone wants a credit card, due to the potential risks involved. 

A recent GOBankingRates survey of 1,021 U.S. adults found that about 30% of respondents were unable to improve their credit score because of high credit card balances or other debt. This was far and away the biggest reason cited for those who could name a specific obstacle standing in the way of a better score.

The good news is that there are ways to improve your credit score without a credit card. One of them is to use a credit-building tool, such as CreditStrong’s Revolv, which helps lower your credit utilization — a key part of your overall score.

Of course, the best strategy is to not get stuck with a low score to begin with. A good first step is to learn what goes into a credit score. The two main credit scores are the FICO score and the VantageScore. Here’s a look at how FICO scores break down, from best to worst:

  • 800 or higher: exceptional
  • 740-799: very good
  • 670-739: good
  • 580-669: fair
  • 579 or lower: poor

The higher the score, the better your chances of being approved for a loan — and for getting favorable terms. Your chances of approval fall dramatically for scores below 670. If your score is 579 or lower, you’ll have a hard time getting approved for anything unless you put down a deposit or find a co-signer.

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FICO has five factors that contribute to your credit score, each of which is weighted differently:

  • Payment history: 35%
  • Amounts owed: 30%
  • Length of credit history: 15%
  • New credit: 10%
  • Credit mix: 10%

VantageScore 3.0 has six factors:

  • Payment history: 40%
  • Depth of credit: 21%
  • Credit utilization: 20%
  • Balances: 11%
  • Recent credit: 5%
  • Available credit: 3%

To raise a low credit score, you can do yourself a huge favor by paying your bills on time. If you build up a record of late-payment notices and collection actions, your score will sink in a hurry.

Beyond that, here are five other quick ways to raise your credit score without a credit card.

1. Improve Your Credit Utilization

Using a smaller percentage of your available credit is one of the most effective ways to boost your credit score. 

“Decreasing your credit utilization from over 30% to under 10% is the fastest way to improve your credit score,” says Erik Beguin, founder and CEO of Austin Capital Bank.

One good way to do this is with a credit-building tool, like Revolv by CreditStrong — a division of Austin Capital Bank. It offers accounts that function like a savings account, but CreditStrong reports a $1,000 line of revolving credit to all three credit bureaus — with a $0 account balance. This pretty music instantly lowers your utilization rate and can boost your score right away. 

2. Use Other Types of Loans

One of the fastest ways to raise your credit score without a credit card is to open up other forms of credit, such as personal lines of credit or home equity lines of credit and then “work on keeping the credit utilization percentages low,” according to Sebastian Jania, owner of Ontario Property Buyers, a real estate solutions and investment company.

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“An example of this would be to get a $30,000 personal line of credit and perhaps spend a couple dollars a month on that line of credit,” Jania told GOBankingRates. “The effect that would have on one’s credit score is that the credit utilization would be incredibly low. Also, the individual would be proving that they can manage large sums of credit, which would directly contribute to their credit score. Getting a personal loan or auto loan can help you build credit and quickly raise your score.”

And as LendingTree noted, getting other types of loans can improve your credit mix, which will also boost your score.

3. Use Your Rent Payments

Although it’s not a common practice among landlords or property managers, rent payments can be reported to your credit bureau. A blog on the Chase website recommends checking with your landlord to see if your rental payment history has been reported to the three major credit bureaus (Equifax, Experian and TransUnion). 

Having a record of on-time rental payments can raise your score quickly. But again, make sure to pay your rent in full and on time each month.

4. Get a Credit-Builder Loan

A credit-builder loan is similar to a secured credit card, which requires cardholders to make a cash deposit when they open an account. The difference is, a credit-builder loan comes in the form of an installment loan instead of a card. 

After you apply and get approved for a credit-builder loan, the money goes into a savings account or certificate of deposit. The funds are made available to you only after you’ve made all your payments. 

The good news is, those payments are reported to the credit bureaus, which helps you build credit and raise your credit score through timely payments.

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5. Sign Up for a Phone Plan

Getting a phone plan in your name is a quick way to start building credit and improve your credit score, as long as your payment history is reported to the three credit bureaus. Ask the phone company if it reports payments to the credit bureaus.

Also, make sure you have the financial wherewithal to afford a phone plan before applying. If you get rejected, it could reflect negatively on your credit, according to Chase. You might also get hit with a hard inquiry when you apply, which could temporarily lower your credit score.

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