Build Good Credit Without Credit Cards

When you're trying to build a good credit history, one oft-repeated piece of advice is to get a couple of credit cards and pay them off on time. Credit cards aren't the only way to skin the credit cat, though.

Photo by SqueakyMarmot.

Not everyone likes the idea of carrying around credit cards in the first place, much less using them just to establish a good credit history. If credit cards aren't your cup of tea, take look at some alternatives recommended by finance blog Suburban Dollar:

Borrow from Yourself – This is the easiest method to establish your own credit history without a credit card. Buy a Certificate of Deposit (CD) from a bank. Then take out a secured loan against the CD for the same amount of time. Put the money you borrowed in a high-yield checking account. Then use the money you borrowed to payback the secured loan. You'll be establishing a credit history and earning interest on your checking account and CD. There are some downfalls to this method. You need the starting capital to fund the CD. You could end up paying more interest on the secured loan than earn through your CD and checking account; however, it's probably less than what you'd pay in fees and interest if you used a credit card. Just make sure to weigh the true costs before going down this road.

We've looked before at ways to safely build your credit history and how to get credit when you have no history at all. What things have you done to build or improve your credit without taking out credit cards—or are you perfectly happy with your credit card? Share your tips in the comments.