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A Unique Way to Build Credit Without Going Into Debt

Updated November 2014.

As someone who recently busted my butt and got completely out of debt, I’m a bit of rebel when it comes to the “normal” methods of building credit. Mostly because many of them are all about using credit cards or some form of debt, to increase your score and build a solid history.

You’ll often hear advice like “open a credit card and pay the balance off at the end of the month” or “take out a personal loan and pay it back within 12 months”.

I don’t agree with this because you’re using debt products to build credit. It’s essentially like the financial system is rewarding you for being in debt. Crazy right?!

Enter WilliamPaid

A few months ago, after I moved to my new apartment, I signed up for (long name for Bill Pay) to pay my rent online automatically, every month.

Besides the fact that it saves time and money (since you don’t have to buy checks to pay the landord) it’s also totally free. And now, they offer the ability for renters to build credit while paying their rent – no credit card or debt required. Pretty cool! Here’s how it works:

Build Good Credit by Paying Rent

Every time you pay your rent on time using WilliamPaid, you build credit. They verify your payments and report them to a credit bureau to help build your FICO score.

In conjunction with Experian RentBureau, each online rent payment made through WilliamPaid will be reported on your credit report. Renters can pay using their banking account, by credit card, cash, or any combination.

You can then schedule a rent payment through your bank account for free, or with a credit card with a 2.9% transaction fee. If you pay with cash there’s a $10 fee as well. But it could be worth it for building a solid credit history without debt.

When you log in to your account, you have the option to enroll in the build credit plan, by clicking “build credit history”.

building credit history

When you enroll in the credit program you get to build your credit history for FREE! Yep, this feature is included when you pay your rent every month using WilliamPaid.

It’s definitely worth the service because you can build credit without having to use credit cards (or secured cards) which could put you thousands of dollars in debt.

Track and Monitor Your Credit Score

When you opt-in to report your rent payment history to Experian RentBureau you can keep track of your credit score as it progresses.

WilliamPaid reports your monthly rent payment and updates your credit score onto your dashboard. Here’s how it will look using a month-to-month comparison.

And it gets even more awesome. You don’t need to be on the lease to build your credit history!

WilliamPaid offers a feature where you can split the rent with your roommate and pay them using WP. So whether you’re on the lease or not, they report your share of the rent to the credit bureau.

Be Sure You’re Secure

If you’re concerned about WilliamPaid not keeping your information secure or not forwarding your payment on time, there’s no need to worry. Like I said, I’ve been using this service for quite a few months now and I’ve never had any problems.

As an FCRA-certified data furnisher, when you make payments through WilliamPaid, it’s completely secure and paid on-time, directly to the landlord.

Plus their customer service has been outstanding and I enjoy interacting with them on Twitter and Facebook. If you’re not satisfied with the service, there’s no commitments. You can cancel at any time.

Sign up now!

I promise, paying your rent with WilliamPaid is much smarter than going into debt to build credit!

WP Experian

[Disclosure: if you sign up, you will get $10 and I will get a commission, but it won’t cost you anything extra. I only recommend services I use personally and the opinions expressed here are my own.]
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About the author: Carrie Smith is the financial artist and owner of Careful Cents, a site that helps creative freelancers overcome financial mountains and make a living on their terms. In May 2013 she quit her full-time accounting job and now works as a full-time business consultant and blogger. She recently launched a new service called, The Client Connection, which matches the best clients with quality freelancers. When she’s not writing about finance, and geeking out over numbers, she enjoys painting, sketching, and making food with her chef husband. You can connect with her in real time on Twitter or Instagram: @carefulcents.

14 Comments... Read them below or add one of your own

  • Kevin Haney October 29, 2012, 4:49 pm

    This appears to be a good way to build credit for someone with no history at all. The biggest benefit is establishing that you are a real person, and the history provides a stepping stone to getting an initial loan.

    Rent is paid in advance, and is not credit. People should be aware that it will not impact the traditional FICO score, and the payment information will not appear in a traditional credit report. Your rent payment history will help round out the FICO expansion score, which uses alternative data for people with no credit history.

    • Carrie Smith October 30, 2012, 9:32 am

      You’re absolutely right Kevin! There are other programs available like that offer similar ways to build credit by paying your normal bills. And the lenders HAVE to accept this as a form of proving credit history. While it’s still difficult to go this route, in my estimation it’s much easier than being a slave to the lender your whole life. Good point though.

  • Janine October 29, 2012, 6:31 pm

    Interesting, I’ve never heard of this. Will have to check it out!!!

  • Robb @WatchOutForFlyingNinjas! October 29, 2012, 11:54 pm

    Like you I hate credit cards but I still have one so that I can get a FICO score so renting isn’t a pain. I don’t even carry it around though, I have 1 bill that is the same every month that I pay off using that – all done online.

    • Carrie Smith October 30, 2012, 9:34 am

      Absolutely Robb! I’m just thankful their are a few alternatives available now, if people want to take the road less traveled, like us. :)

  • Jessica October 30, 2012, 7:10 am

    I’m REALLY interested in this. I have crummy credit right now and will need to start rebuilding my credit without using cc’s. This sounds like a great way to do it. I’m signing up!

    • Carrie Smith October 30, 2012, 9:22 am

      I think you will find it super helpful @twitter-119435136:disqus I really enjoy using their service and what the company is all about. Let me know if you have questions!

  • Jordann October 30, 2012, 1:35 pm

    This is a great tool! I think this would be a great way for a university student who doesn’t have a credit card to start building credit without being tempted by the “free money” available through credit cards.

  • The Savvy Scot October 30, 2012, 4:39 pm

    That sounds like a great alternative to opening a dangerous credit card account! Is it available in the UK (or something similar)?

    • Carrie Smith October 31, 2012, 8:25 am

      That’s a good point Scot. I don’t know but if there isn’t something like that in the UK there should be :)

  • Carrie Smith November 25, 2012, 6:41 pm

    Thanks for expressing your valid concern Marc. I don’t encourage anyone to try out any of the products a I use personally and endorse unless you find they will be of great benefit to you. Maybe after spending some time following my blog, you will see that I have the best intentions for helping freelancers and entrepreneurs succeed with their finances. Good luck!

  • Tahnya Kristina December 29, 2012, 9:31 am

    Hey Carrie, this is a great post. Building credit is so important and debt definitely sucks. PS – I love the new blog design. Happy New Year.

    • Carrie Smith December 29, 2012, 7:12 pm

      Thanks Kristina! I hope you have a Happy New Year as well :)

  • nsb1981 May 23, 2013, 2:46 pm

    Carrie, how have your experiences been now that you’ve used this for a few months? It’s useful now that it reports to EX, not just PRBC expansion.
    Does it report as an installment tradeline, and if so, does it help or hurt your DTI?

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