How to Build Credit Score Without Debt

It's almost impossible to move forward into adulthood without a credit record. 

Whether you're investing in property or planning to rent, your bank or landlord will want to ensure you are a reliable candidate to pay your bond, or pay your rent timeously. 

So how do you build towards a worthy credit score without having debt follow you around? Here's our advice: 

Become an authorised user 

An authorised user is granted permission to charge to the main account holder's account. Being an authorised user on someone else's credit card, such as your parents' or partner's, comes with the benefit of building a credit score without being at risk of going into debt. The credit history of that account will add up towards your personal score, but the bank will not hold you responsible for its repayments. 

In the same breath, if you become an authorised user to an account that is building a bad credit history, that will also show up on your personal credit record, so be wise before rushing into the commitment. 

Have rent and non-credit bill payments counted 

Many credit-scoring formulae include rent to your score as it also proves reliability. As most landlords won't report timely payments to the credit bureaus, you might need to get a third-party tracking system to record the information. 

If you're renting property, you're most likely also accountable for utility bills such as electricity and water. This also falls under non-credit bill payments and can be tracked to add to your score. 

Get a credit card 

Yip! You read that correctly. You can absolutely get a credit card without spinning into the cycle of debt. 

If you trust yourself to be responsible with a card, you can use it for small expenses throughout the month. Just be diligent about paying it off at the end of each billing cycle. This way you won't pay interest, nor will you carry around any heavy debt. 

A credit card without a balance will increase your score, as you'll have a history of on-time payments as well as a low debt-to-credit ratio. On top of this, you could score yourself some significant rewards from your loaning company. 

Building a credit record is not as difficult as many think. If you are somewhat financially independent, you will most likely already be making payments that can add up to your score. 

If you're unsure of whether you are on the right track to getting that home loan - contact us directly for assistance!