How to Build Credit without Installments

[Kyle Marek]

I'm 25, a teacher with no debt and a some money saved up. I plan on saving money another year because I am lucky enough to be living rent free for now, and my goal is to have a good credit score so I can purchase a multifamily. My problem is I have had limited credit history.

I have had a credit card with a $3000 limit that I use occasionally to fund bigger purchases, but that's about it. I've done research and read the fastest way to build good credit is by paying installment loans on time. Only problem is, I don't have any of these!

What can I do in the next year to build credit as well as possible without having installment loans to help me?

Thanks for your time!

[Terre B.]

Open an account at your local credit union.  (or bank if you must.)  Deposit $5000.  Then speak to the loan officer, ensure they will report to all 3 bureaus and take out a loan for $5000. Make sure the term is more than 6 months.  Make the monthly payments.  

Rinse and Repeat.

If you live rent free, (hug your mother), you can also pay rent.  Have her put that in a savings account for you, but write her a check.  Then go to credit karma, sign up for rental karma and they will verify with your "landlord" and that will put payment history on your credit.

I once had to cosign for my sister, who made 3 times as much money as I did.  She simply paid in cash.  The credit bureaus don't care how much you make, they want to see how well you manage it.  If you always pay cash, that shows them nothing.