How to Increase your Credit Score with NO DEBT

You need credit, but for creditors to approve you, they want to see your credit score. It’s a double-edged sword that millions of people face because they either aren’t able to get credit, or they pay high-interest rates because of their lack of credit.

The good news is you don’t need debt to build a credit score. Whether you’re a young adult just starting or you have credit but need to improve it, there are ways to increase your credit score with no debt.

Here’s how.

Become an Authorized User

Most credit cardholders can add an authorized user for free. The authorized user can use the credit card and can report things like a lost or stolen credit card to the credit card company.

Many credit card companies (not all) report authorized users to the credit bureaus. This means you’ll get credit for the on-time payments and good use of the credit line. Although you receive your own card, you are not legally responsible to pay back the bank for what you spend as an authorized user. The main account holder is responsible for all transactions spent on the account. So, if someone adds you as an authorized user on their account, make sure to work out the repayment terms with whoever added you. Likewise, if you add someone to your account as an authorized user, you should trust that they’ll repay their transactions.

It can be tough to ask someone to add you as an authorized user, but parents or other close relatives are often willing to help. If you’re just trying to get the credit, you can be added as an authorized user but not take possession of a credit card. This way you don’t use the card, but you get the benefit of the good credit to build your credit score.

Sign up for Experian Boost

Experian Boost is a free program that ‘boosts’ your credit score for paying bills that normally don’t report to the credit bureaus.

When you sign up for Experian Boost, you give Experian access to your bank account. You tell them which bills you want to get credit for paying on time and they track your payments.

Common bills that Experian Boost uses include:

  • Netflix
  • Hulu
  • Disney+
  • HBO
  • AT&T
  • Spectrum
  • Verizon

If you pay these bills on time and give Experian permission to track the payments, it can boost your credit score almost instantly. Experian claims it’s better than trying to reverse ‘bad’ credit or eliminate collections from your credit report because you’re getting a ‘boost’ for good payment habits and not trying to erase a bad payment history.

Many of these services offer or require automatic payments which ensures you make your payments on time and you get the credit for it.

Try a Credit Builder Loan

A credit builder loan isn’t debt, even though it has the name ‘loan’ in it. Rather than receiving funds from the loan like you would if you borrowed an unsecured personal loan from your local bank, the funds go into a savings account.

You don’t get access to the funds, but you must make your minimum monthly payments. The bank reports your payments to the credit bureau. If you make them on time, you’ll improve your credit score by showing financial responsibility.

Once you pay the loan off in full, you’ll receive the funds you borrowed plus the interest they earned and you should walk away with an improved credit score.

Recommended Credit Builder Loan Providers:

CompanyLink,,, Self Financial Logo,,, SeedFi Logo

Ask your Landlord to Report your Rent

Landlords don’t often report rent because they aren’t obligated to and it can get expensive. But some will do so if you ask.

It doesn’t hurt to try. Ask your landlord to report your rent and explain the reasons why. Many will oblige, knowing that housing payment history can greatly influence a credit score. They may also have other tenants who want their rent reported too.

If your landlord can’t or won’t report the rent, you can pay for a service to do it for you. Most services have an enrollment fee plus a monthly service fee, so look at your options carefully before enrolling. Typically, paying for the service for a year or two can boost your credit score considerably.

Use a Secured Credit Card

A secured credit card is like a credit builder loan, except you have charging privileges. You must make a security deposit, which is equal to your credit line. For example, if you put down $500, you have a $500 credit line.

You can use a secured credit card like any other credit card. If you make your payments on time, you get the credit on your credit report and you don’t lose your security deposit. The key is to charge only what you can afford to pay off in full. This will help your credit score the most and keep you out of debt. 

Recommended Secured Credit Card Providers:

CompanyLink,,, Self Financial Logo

Pay your Existing Debts

If you have existing debts, paying them down or off will help your credit score. The payment history helps increase your score, but so does the lower credit utilization rate. If you have any credit cards with over 30% of the credit line outstanding, it hurts your credit score significantly.

Focus on those credit cards first, paying the balance down as much as possible. Next, pay the balances off completely. Since payment history and credit utilization are the two largest portions of your credit score, paying your existing debts down or off can be an ideal strategy. 

If you are looking for a debt paydown strategy, click here for my breakdown of the most popular debt paydown methods. 

Final Thoughts

It’s possible to boost your credit score without going into debt. Too many people assume they must take on personal loans, credit card debt, or any other debt they can get their hands on to build a credit score.

Sometimes this can be the worst thing you can do, especially if you can’t afford the payments. Instead, use the tactics above to strategically improve your credit score. This way when you need to apply for credit, such as a mortgage or loan to buy a car, you’ll get the best terms and interest rates available and won’t have to worry about how you will afford your payments.

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