Get A Good Credit Rating Without A Credit Card

Written by on September 19, 2013 in Money - No comments | Print this page


Improve The Credit Rating Without A Credit Card

Most people are under the impression that if they’ve never been in debt and always pay their bills on time that they must have a good credit rating.

However, the falseness of this opinion often comes as a rude shock and much too late for some.

If you’ve ever had to apply for rental agreement or thought of getting on a mobile phone plan, chances are you’ve already discovered where you stand when it comes to your credit rating.

The truth about credit

The first thing you should know is that there is no such thing as a universal credit rating. According to, “every lender has a ‘perfect customer’ wish-list, so a rejection from one isn’t a rejection from all.

Each judges you differently, it varies for each product and scoring systems are never published.”

Under the Consumer Credit Act, you have a right to see your credit score as held by each agency for £2 through websites like Equifax, Experian and Callcredit.

The reports will contain your personal details and information on your financial links, accounts, electoral registration, missed payments and a score. Always check your score before making any big applications and always check that the information is correct.

No credit card, no credit?

Incorrectly, a lot of people think that getting a credit card is the only way to start building or improve upon a credit score. But for many, getting a credit card is not an option.

Whether it’s because you won’t qualify, have a shaky financial history, or even just moved countries, getting your hands on a credit card is not always that simple and in some cases, is not always the best course of action.

In an article about boosting credit scores in The Guardian, finance reporter Virginia Wallis explained how credit score relates to credit cards, “not having a credit card doesn’t give you a bad credit rating as such, but without data about how you manage credit, lenders may be reticent about lending to you.”

Your history

Lenders will look at everything from how often you move to your employment history. They are looking for signs that you are not a risky potential customer.

The more steady and constant you can keep your history the better it is for your score. Even small details like keeping the same phone numbers, being listed on utility bills and having long standing banking accounts help.

If you’ve never had a bank account, then open one immediately. If you’re concerned about qualifying for a regular bank account, open an online account at an alternative banking service.

Will Thomas from Eccount Money, for example, comments, “electronic basic bank accounts are available to most people, even if you’ve got a less-than-spotless banking history. They could be the first step on your path to financial freedom and building a solid credit rating.”

Credit without credit cards

To start improving your score without the use of a credit card, try applying for a very small loan – even if you don’t need the money.

A small loan with a strong deposit might be achievable for you and it will go a long way to demonstrate to lenders that you have the ability to commit and a responsible attitude towards borrowing money. Having a student loan can in some cases helps with this.

If you haven’t already, register in your area on the electoral role. This is an important step to establish a presence ‘on the radar’.

What else you can do

  • To further improve your credit score, cancel and close any unused cards, whether they’re department store cards, petrol cars or credit cards.
  • Don’t make too many applications in a short period of time, as this will look as if you’re trying to cover up a poor score. Instead, leave some time between applications.
  • Use your landline when applying for anything and when filling out forms, it gives the impression that you have a steady place of residence.
  • Make sure all the details on your accounts are the same and correct. Consistency is essential.
  • Become an authorised user on someone else’s credit card. According to, “when you’re added as an authorized user to someone’s credit card, his or her history with that card is typically imported to your credit reports. If the person is responsible with the card — charging lightly and paying on time — that could enhance your scores.” However, if that person is not responsible with their card it would also damage your report, so choose your card-holder wisely.

Time will tell

As with everything, developing a solid credit rating will take time. As Jeremy Vohwinkle from says, “there are no shortcuts or tricks that can take you from no credit at all to a high score in a matter of months or even a few years.

Your credit score is based on a number of factors such as payment history, length of time you’ve had credit, and much more.” It all starts by opening a bank account and will hopefully end with a glowing credit report.

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William Masters is a finance journalist who reports out of London. He has established himself as a sought-after professional with years of experience writing about topics ranging from global economies to personal money management.


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