Best Way to Build Credit Without Credit Cards

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The best way to build credit without using credit cards is to pay bills from utilities, rent or even gym memberships on time. Think outside of the box to prove a positive credit history with advice from a financial adviser in this free video on money management and financial planning.

Part of the Video Series: Credit Cards & Personal Loans
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Video Transcript

Hi, my name is Matt McKillen and I'm with Innovative Financial Group. A question posed to me today was, what's the best way to build credit without using credit cards. Well I've had many first time home buyers come to me to purchase a mortgage and they did not have any credit cards established in their name. And part of the process of us getting someone approved, especially when we're going through an FHA loan, is to be able to provide at least three trades or three credit references even though that may be what we call alternate trades. One of the forms of that is by having a letter from a utility company. So if you are renting an apartment be sure that you pay those light bills on time and those water bills on time because a letter from one of those companies can be used to help build a credit history. Another item I can kind of point out is when you pay your rent. Always pay with a check. A lot of times we require to look at twelve months canceled checks to prove that someone is making their rent payments on time. And it really shows value to a lender when they're trying to approve them for a mortgage and they don't have any credit card history on their credit report. We've even went so far as to get letters from gym memberships, that they make their gym membership payments on time. So just think outside the box, even though you may not have credit cards or credit card debt on your credit bureau, they are other things that you pay for on a monthly basis that can be used to help build your credit. Again, my name is Matt McKillen and I'm with Innovative Financial Group.

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