You can build credit through secured savings accounts, credit-builder loans, becoming an authorized user, and paying bills on time — none of which require a credit card
A credit card is one path to building credit, but it is not the only one. If you do not have a card or do not want one, you have several concrete alternatives that report to the three major credit bureaus — Equifax, Experian, and TransUnion — and will raise your score over time.
The fastest routes are a credit-builder loan from a credit union or online lender, becoming an authorized user on someone else's account, or opening a secured savings account that reports payment history. Each works differently, takes different amounts of time, and costs different amounts of money. The right choice depends on whether you have savings to set aside, whether you have someone willing to add you to their account, and how quickly you need to build history.
Key Takeaways
- A credit-builder loan lets you borrow money you cannot touch, make monthly payments on it, and build credit while you save — typical loans are $500 to $1,000 with monthly payments of $25 to $50.
- Becoming an authorized user on someone else's credit card account can raise your score within weeks if that account has a long history and low balance, but you inherit their payment problems if they miss payments.
- Secured savings accounts and credit-builder savings accounts report your deposits and on-time payments to credit bureaus, though they build credit more slowly than loans.
- Paying utility bills, phone bills, and rent on time does not build credit unless the company reports to credit bureaus — most do not, though some newer services will report rent payments for you.
- Your credit score typically rises 30 to 100 points within the first six months of consistent on-time payments, depending on your starting point and the type of account.
Credit-Builder Loans: Borrow Money You Cannot Spend
A credit-builder loan works backwards from a normal loan. You borrow $500 to $1,500, but the lender holds the money in a savings account you cannot touch. You make monthly payments — usually $25 to $75 — for 12 to 24 months. Once you finish paying, you get the money back, minus interest and fees.
The point is not to borrow money; it is to prove you can make payments on time. Each payment reports to all three credit bureaus. Most people see their score rise 30 to 100 points within six months of starting a credit-builder loan, depending on their starting score and credit history.
Credit unions typically offer the cheapest credit-builder loans. Organizations like Navy Federal Credit Union, Connexus Credit Union, and Penfed Credit Union offer them to members, and membership is often open to the general public or to people in a specific state or profession. Online lenders like MoneyLion and Self also offer credit-builder loans to people with no credit history. Fees and interest rates vary — compare the total cost before you commit.
Becoming an Authorized User on Someone Else's Account
If someone you trust — a parent, spouse, or close family member — has a credit card with a long payment history and a low balance, you can ask them to add you as an authorized user. Their account history then appears on your credit report, which can raise your score within weeks.
The person who owns the account does not have to give you a card or access to the account. They straightforward ask their card issuer to add you as an authorized user. Most issuers will do this over the phone in minutes. Your credit report will then show their account, their payment history, and their credit limit — all of which help your score.
The risk is real: if the account holder misses a payment, it damages your score too. If they carry a high balance, it can hurt you both. Before you ask someone to add you, make sure their account is in good standing and they pay on time every month. If they later miss a payment, you can ask the issuer to remove you as an authorized user, and the account will stop appearing on your report within one to two billing cycles.
Secured Savings Accounts and Credit-Builder Savings
Some banks and credit unions offer credit-builder savings accounts that report your deposits and on-time payments to credit bureaus. You deposit money into the account — usually $25 to $500 — and the bank reports each deposit as a payment. Over time, your payment history builds your credit score.
These accounts build credit more slowly than credit-builder loans because the payment amounts are smaller and the history is shorter. However, they require no debt and no risk. You are straightforward saving money while building credit. Some accounts charge monthly fees ($1 to $5), so compare the cost against the credit benefit.
Credit unions like Connexus and Self offer credit-builder savings accounts. Some online banks also offer them, though they are less common than credit-builder loans. Ask your bank or credit union whether they report savings account activity to credit bureaus — not all do.
Paying Bills on Time (If They Report to Credit Bureaus)
Paying your utility bill, phone bill, or rent on time does not automatically build credit. Most utility and phone companies do not report to credit bureaus unless you fall behind and they send your account to a collection agency. By then, the damage is done.
However, some newer services will report your rent payments to credit bureaus if you use them. Services like Experian Boost let you connect your bank account and have them report utility and phone payments you already make. RentBureau and Rental Kharma report rent payments to credit bureaus. These services are free or low-cost and can help, but they work slower than a credit-builder loan because the payment amounts are smaller.
If you want to use rent or utility payments to build credit, research which services report to which bureaus before you sign up. Not all services report to all three bureaus, and some report only to one.
How Long It Takes to Build Measurable Credit
Your credit score needs data to calculate. If you have no credit history at all, the bureaus cannot generate a score until you have at least one account reporting for at least six months. Most scoring models also need a mix of account types — a loan and a card, for example — to calculate a full score.
With a credit-builder loan or authorized user account, you can see a score within 30 to 90 days. With a secured savings account or bill-reporting service, it may take four to six months before you see movement. The longer your accounts stay open and the more consistently you pay on time, the higher your score will climb.
Do not expect a perfect score quickly. Building credit is a multi-year process. A score of 620 to 660 — enough to may have access to for many loans — typically takes 12 to 18 months of consistent on-time payments starting from zero. A score above 700 usually takes two to three years.
Comparing Your Options: Which Route Fits Your Situation
| Method | Cost | Time to See Results | Best For |
|---|---|---|---|
| Credit-builder loan | $50–$200 total (interest + fees) | 30–90 days | People who want fast results and can set aside $25–$75 monthly |
| Authorized user | Free | Weeks | People with a trusted family member or partner with good credit |
| Credit-builder savings | $12–$60 yearly (fees only) | 4–6 months | People who want to save money while building credit with no debt |
| Bill-reporting service | Free–$10 monthly | 4–6 months | People who already pay bills on time and want to report that history |
If you have $500 to $1,000 in savings and want the fastest results, a credit-builder loan is usually the best choice. You pay a small fee, make monthly payments, and your score rises noticeably within six months. You also get your money back at the end.
If you have a family member or partner with strong credit and a long account history, becoming an authorized user is free and fast — sometimes the fastest option available. The risk is that their payment problems become yours, so choose carefully.
If you have no savings and no one to ask, a bill-reporting service or credit-builder savings account is a lower-risk starting point. The results take longer, but there is no debt and no risk of someone else's mistakes hurting you.
Frequently Asked Questions
Can I build credit if I have no income?
Yes. A credit-builder loan does not require income verification — the lender holds your money as collateral, so they are not taking a risk. Becoming an authorized user also does not require your income. However, some lenders may ask about income to verify you can make monthly payments, so check with your specific lender.
Will my credit score go down if I become an authorized user?
No. Adding you as an authorized user does not hurt the primary account holder's score. However, if they later miss a payment, both of your scores drop. If you want to remove yourself, ask the card issuer to take you off the account, and it will stop appearing on your report within one to two billing cycles.
What if I cannot afford a credit-builder loan payment?
Look for a smaller loan — some credit unions offer $300 to $500 loans with payments as low as $15 to $25 monthly. Alternatively, use a bill-reporting service or credit-builder savings account, which have no monthly payment requirement and let you deposit whatever amount you can afford.
Do I need to use a credit card eventually to build credit?
No. A credit-builder loan alone can raise your score to 700 or higher over time. However, lenders sometimes prefer to see a mix of account types — a loan and a card — before they approve you for larger loans like a mortgage. If you want to borrow money later, you may eventually need a card, but you can build substantial credit without one.
How often should I check my credit score?
Check it every three to six months to track progress. You can get a free score from Credit Karma, NerdWallet, or your bank. Once yearly, pull your free credit report from AnnualCreditReport.com to check for errors. Do not check it more than monthly — checking too often can feel like you are desperate for credit, though it does not actually hurt your score.