Building credit can be a catch-22. You have to use credit in order to build it. In other words, you usually have to open a credit card or loan account to demonstrate that you are a responsible borrower. The promptness of your credit payment and amount of debt remaining are factored into your credit report and credit score, which ranges from 300 to 850 -- the higher the score, the better your credit. There are three main credit bureaus (Equifax, Experian, and TransUnion) that collect information about you; this includes your credit account payment history (go here for a full explanation).

Unfortunately, the payment of most common bills (such as utilities or rent) are not factored into your credit report from the "big three." That is unless you pay them late -- in which case they will have a negative impact on your credit score. However, there's a new credit bureau on the scene -- PRBC, and it's accredited by the Better Business Bureau. By registering, PRBC gives you a credit score based on your utilities and rent bills. They keep track of on-time payments, not just late ones, which allows your positive payment record to be part of your credit score. They do charge some fees, but getting credit for paying common bills on time might be a safer and easier way to build credit than through traditional methods like credit cards and loans. For more tips check out, this Ask brass article and Extra Credit.

--Jens