Hoping to buy a house or a new car someday? You probably plan to take out a loan to make the purchase—and you probably know you’ll most likely need credit to get that loan.

How do you get the credit you need? Do you have to start taking out loans now to get credit?

The good news is that there are ways to build your credit right now so you’ve got a good chance of having a high score when you’re older. The best part is you don’t even have to go into debt to start building a score!

Myth: You Have to Take on Debt to Build Credit

One of the biggest factors in your credit score is payment history. Each time you pay your bills on time, you should be helping your credit score.

This has created the myth that you need to take on a lot of debt to build your score. The more you borrow, the more payment history you get.

But it’s not true. You can build your credit without taking out a massive loan or racking up credit card bills. In fact, not going into debt while building credit is a great way to get yourself into good money habits.

As it turns out, the actual amount you borrow isn’t as important as making your payments on time.

Ways to Build Credit Without Going into Debt

You usually need credit to get credit, but there are a few options if you’re starting from scratch. Check out the ways you can start building credit with minimal debt:

1. Open a Secured Credit Card

Secured credit cards provide a great chance to dip your toes into paying with credit. You’ll get all the responsibility of a regular credit card—and all the freedom. Unlike a normal credit card, however, you need to pay cash up front to open the card.

This cash gets put into a holding account. Most secured cards use the cash you deposit as the maximum amount you can put on your card (your credit limit). The credit card company can use this money if you suddenly stop paying your bills.

Just don’t forget that a secured credit card is a real credit card. You’re still charged interest if you only make the minimum payment. It’s also still very possible to get yourself into debt.

The best way to use a secured credit card is to treat it like a debit card:

• Only make purchases if you have the cash available to cover the cost.
• Plan to pay for things you already have to buy, like gas or car insurance.

2. Ask to Be an Authorized User

Not ready to get a credit card on your own? You could piggyback your credit score using a parent or relative with good credit.

Let’s say your parents have good credit and use a credit card regularly. They could add you as an authorized user to their existing card. You’ll get a card in your name, but the account owner is responsible for the bill. As they pay the bill each month, you get to build some credit.

The big drawback to becoming an authorized user is the potential to ruin a relationship. Never spend more than you’re supposed to if you’re an authorized user. Or, offer to pay the card owner back for any purchases you make.

You can even choose to not use your card at all. This way, you still get some of the credit without the risk of overspending. This can be a good strategy if you’re a teenager looking to build a credit score from scratch.

Finally, another risk to consider when joining a credit card account as an authorized user is that your credit health is also dependent on the primary user. If the authorized user misses a payment, it will reflect on your credit history as well.

3. Get Credit for Rent Payments

You might be able to get credit for making on-time rent payments if you live on your own. Most landlords don’t automatically report your rent to credit bureaus. You’ll need to ask your landlord if they do, or if they’d be willing to start. You could also pay one of several companies that report your rent payments for you.

Don’t hold your breath that your rent will magically build your credit score, however. Even if your landlord reports payments, it might only be to one credit bureau. Or, the credit scores a lender uses might not use rent payment to calculate your score.

If you’re thinking of using a third-party company to report your rent, be sure to ask a few questions:

• Do they report to all major credit bureaus?
• How much does the service cost?
• Does your landlord have to do extra work or pay a fee?

4. Use a Credit Builder Loan

If you really want to avoid debt and build your credit, you should consider a credit builder loan. These are not like your normal car or personal loan. Most regular loans give you the money you borrow up front: You use the money and then pay it back, with interest.

Credit builder loans work backward from a normal loan. The amount you borrow is put into a holding account, such as a savings account. You don’t get the loan money until you’ve made all the monthly payments. Once you’ve paid the full amount of the loan, the money you borrowed is given to you.

Credit builder loans usually come in low amounts and are short-term. You might borrow less than a hundred dollars and have it paid off in a year.

You can even find credit builder loans that are totally free. Unlike other credit builder loans, Kikoff does not require you to pay into a savings account and lock your money. Instead, Kikoff extends you a small, interest-free credit builder loan that you pay back on a monthly basis.

Avoiding Debt and Building a Good Credit Score

No matter how you want to start building credit, you don’t have to go into debt to do it. Try one of these methods to get started building a credit history instead of taking on unnecessary debt.