Millennial Money: Is It Okay To Never Have A Credit Card?


No financial product is universal, and it’s okay if credit cards aren’t right for you.

With quick online applications and, in some cases, instant approval, credit cards make building your credit history as easy as making purchases. But they can also make it easier to get into debt if you have a hard time paying on time or tend to spend more than you have.

As a result, some people view credit cards with skepticism: 17% of American adults don’t, according to a 2019 Federal Reserve report.

No financial product is universal, and it’s okay if credit cards aren’t right for you. There are other ways to build credit – and keep your credit scores high – that don’t involve a credit card.


If you’re already making on-time payments on an installment loan, like a student loan, your efforts make a difference. Loan payments are reported to the credit bureaus, so over time this can build up your credit history.

“Student loans are often the easiest loans to get, especially when you’re very young,” says Adam Sanders, director of Successful Release, a Philadelphia-based organization that aims to help ex-offenders achieve financial and professional success after retirement. jail. He adds that “student loans are often the vehicle by which many adults begin to build up credit.”

No student loan in your name? A homebuilder loan from a bank or credit union may be an option. With this loan, the lender deposits a predefined amount into a savings account and you make monthly payments until the deposit is paid off.


The other bills you pay on time each month (cable, water, electricity, etc.) usually don’t have a direct effect on your credit reports, but that doesn’t mean they aren’t important to your business. overall financial health.

“You have to maintain impeccable nontraditional credit,” says Roslyn Lash, Certified Financial Advisor, author of “The 7 Fruits of Budgeting,” and founder of FinCoach Consulting in Winston-Salem, North Carolina.

Ignoring things like utility and cell phone bills could send these accounts into collections, which can definitely hurt your credit.


Speaking of utility and cell phone bills: While these on-time payments have not traditionally been factored into credit reports, the tradition is changing. Experian Boost offers a free way to add positive bill payment information for this type of expense to your Experian credit report. To participate in Experian Boost, you must create an account through Experian.

“Two in three consumers see an improvement in their credit rating, with an average increase of about 13 points,” says Rod Griffin, senior director of consumer education and advocacy for Experian. “People with thin credit records, with less than five credit accounts, report an average increase of 19 points in their FICO 8 scores.” (There are many versions of FICO Score; FICO 8 is one of the most widely used in approval decisions.)

The trap ? Not all lenders use Experian or the rating models affected by Experian Boost when making lending decisions.

Another scoring model, called UltraFICO, is still in the pilot phase. Once it becomes publicly available, consumers can choose to allow access to their checking and savings account activity. This includes the length of time you open accounts, recency and frequency of bank transactions, proof of constant cash flow, and a history of positive account balances. Like Experian Boost, however, going with UltraFICO won’t impact all of your credit scores.

Paying your rent can also help build your credit history. Some homeowners and property management companies already report payments to the credit bureaus, but if yours doesn’t, ask if they would be ready to start. Or consider signing up for a rent declaration service. A statement of on-time rent payments not only helps your credit, but also makes it easier to qualify for other rental housing in the future.


It does involve getting a credit card, but it doesn’t require you to open the account yourself, use it, or even have the card in hand.

It only requires that a primary account holder – maybe a family member or loved one – adds you to their account. You will receive your own card, but the primary user is responsible for any debt you accumulate.

To bolster a lean credit history, make sure the primary user already has a good, long credit history, and see if the card issuer is reporting authorized users to the credit bureaus.


This column was provided to The Associated Press by the NerdWallet personal finance website. Sara Rathner is a writer at NerdWallet. Email: [email protected] Twitter: @SaraKRathner.


Federal Reserve Report on the Economic Well-Being of U.S. Households in 2019 – May 2020

NerdWallet: How to Report Your Rent to the Credit Bureaus

Experian Boost

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