Credit Building

5 ways to start building your credit history without a credit card

Apr 12, 2023

When you’re just starting out in the world of finance, people are often warned away from using credit cards — specifically because of dangers of credit card misuse. It’s easy to feel uneasy about the thought of them, especially when you see the kind of debt that you can accumulate if you’re not careful. 

And although getting into debt and missing payments are definitely negatives for your financial situation —,  those bits of plastic are great tools for building evidence of how you use credit. With that history of credit use, you’ll be able to show lenders (in the future) how responsible you are with borrowing money. 

There are other ways to help you build this evidence though. And whichever you choose, what you actually need to master is how to use credit responsibly

The golden rule of building credit is to make your payments, on time, every time

This is essential for your credit score, as even one missed payment will leave a mark on your credit report for six years (eek!). If you sign up to a credit agreement, it’s really important that you can afford to repay the agreed amount each month, so always consider your long-term money situation beforehand.

5 simple ways to build your credit history without using a credit card

1. Report your rent

Using a rent reporting service means you can put all that money to good use (as well as keeping a roof over your head, of course), and start building yourself a history of good credit use. Typically, rent won’t automatically build your credit, so you need to choose a reporting service to act as a middle-man.

You can build your Experian credit history by using Loqbox Rent. The best part is, it doesn’t matter who you pay your rent money to, as long as it’s the same amount each month and leaves your bank account on a set day of the month. Check it out here!

2. Be in charge of a household bill

The next time the household’s broadband or a utility bill contract is due to end, check out the best comparison deals and consider becoming the named billpayer yourself.

It will mean taking on the responsibility of paying the amount each month, but it will do wonders for your credit history to show that consistent payment history.

Important note: If you are named with another person on a bill, you’ll become ‘financial associates’ and your credit scores can affect each other’s . Same applies to joint accounts, so be mindful of who you’re sharing your financial responsibilities with.

3. Get Loqbox

Shameless plug, we know, but if you’re nervous about getting a credit card then Loqbox could be a good alternative for you. We encourage everyone to use our credit-building tools, and all our products are available without any hard credit check, or the temptation to spend more than you can afford.

We’re also there for you on the whole journey, supporting you in growing your financial knowledge and wellbeing, as you go.

4. Pay by Direct Debit

Whether it’s a cheap SIM-only phone contract or repaying a personal loan from your bank or building society, whatever credit agreement you sign up to, they’ll likely be reporting to at least one of the three main credit reference agencies (if not all of them).

Setting up Direct Debits to pay your monthly instalments is great for building credit because:

  • You can set them up for payment on, or just after, your payday (if applicable to you) and never accidentally spend the money or miss your payment

  • You can start to build a long history of credit with that lender (something which future lenders like to see)

5. Build your credit as you save money

Loqbox Save is a clever way to save yourself a pot of money (for a new car, house deposit, holiday, emergency fund, wedding — whatever your goal) and build your credit as you go. Decide how much you can save each month for a year, and we’ll loan you the full amount.

Each month, you’ll save a fixed amount of money with us and we’ll deduct these from your loan instalments. After 12 months of saving, you get to unlock all your savings, and should have a year’s worth of credit history to show.

Improvements to your credit score are not guaranteed.

Your overall financial behaviour counts toward your credit report too. Here’s a list of what common things affect your credit scores and how to improve them.

More useful information

You may be wondering if student loans help or hinder your credit history, so here’s the lowdown on that.

Overdrafts are another common way for people to start borrowing money, and we’ve written a blog about how that could affect your credit score here. 

And lastly, if you feel like you missed out on a financial education, just know that you wouldn’t be alone!  Ipsos Mori ran a survey in 2021 which found 90% of people in England felt they’d learnt “not very much” or “nothing at all” about money and finances at school.

Trying to navigate how it all works can be really confusing . So we created Loqbox Learn for you to use as a hub for growing your  knowledge and understanding of the financial system. Bookmark the topics and come back to use it whenever you need to.

Before long, you’ll be feeling more confident and capable, and have a new credit history to match. Good luck!

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