Who Uses Your Credit Score, and How to get Credit Without a Credit Card

by on February 10, 2010 · 5 comments

The extent that your credit score is tied into your life is staggering. Here is a list of people who make it a habit of checking your credit score before offering their services and sometimes before determining what rates to offer their service at:

  • Mortgage lenders, car loan lenders, lenders of any sort
  • Credit Cards
  • Auto Insurance
  • Home Insurers
  • Bank Accounts
  • Landlords
  • Utility Companies
  • Employers
  • Cell Phone Plans

I’ve read many stories on financial blogs about people who applied for a credit card knowing that they needed to establish credit only to find themselves in horrible debt for years afterwards because of a year of spending for an inflated lifestyle. 

                After I graduated college, I also thought that getting a credit card was the only way to build up a good credit history, something I knew I would need in the next stage of my life. My credit card usage has been very disciplined (I have only ever paid one finance charge of $39 in four years because I shut down a bank account and forgot that my credit card bill was automatically debited from this account), so I would certainly have not chosen a different path to a good credit score and history for myself, but it is interesting to me to find other ways that people can build up a score that means so much in our day and age. 

                Here are ways to build up your credit score—whether you are just starting out with no credit history, or needing to repair your existing credit history—without using a credit card:

  • Open up a checking and savings account
  • Pay recurring bills on time
  • Self report on-time payments of recurring bills: “Fair Isaac, the firm that created the FICO score, has developed the FICO Expansion score to measure the creditworthiness of people who have little or no information on file with the three major credit bureaus.” You can track your payment history for things like water and electricity bills at Payment Reporting Builds Credit. You can also self report to the three credit bureaus; collect 12 months or more of on-time bills, and contact each of the three main credit bureaus in order to find out how to report these (fax or mail).

As you can see, even if you are determined to live your life without credit—a worthy goal—your credit score or lack thereof may still hold you back or cost you more for services. But it is nice to know that getting credit does not always revolve around having and using credit.

{ 2 comments… read them below or add one }

BluSky

This is your best post yet. I had no idea there was an avenue to self report. Both my mortgage and my car are financed privately as was my previous car through a company that has basically told me the only way they’ll report to the bureaus is if I don’t pay them. The proportion of types of credit you have factors into your credit score. Without those two installment accounts reporting, it looks as though I have nothing but revolving credit card accounts and am almost 40 and don’t own a car or a house!

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Amanda L Grossman

Hello BluSky! I am glad you have found this helpful. I must admit, before researching for this article, I was not aware that you could contact the credit agencies and report on your credit history with bills like electricity payments and other utilities, meanwhile building your credit history without credit cards, or helping a bruised credit score.

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