NEW YORK (MarketWatch) -- Renting instead of owning your home may seem like flushing money down the drain, but paying that and other bills on time can help you build credit if your current score doesn't qualify you for a mortgage.

Young people and others with little or no credit -- among them the recently widowed or divorced, immigrants and those who operate on a cash-only basis -- may be getting a break soon, says writer Urja Dave in the March issue of Kiplinger's magazine.

Fair Isaac & Co., the company that compiles the FICO credit score, has developed a new method of gathering credit information and building it into a so-called Expansion score. Such nontraditional consumer-credit data include deposit-account records, layaway purchases and, whenever possible, utility bills. Until now, efforts to collect such data have yielded spotty results because most states prohibit utilities from disclosing the credit histories of their customers.

Under the new program, Fair Isaac would include information from Pay Rent, Build Credit (www.prbc.com), a community development service Web site that collects consumer data on rent and other recurring bill payments. You can enter your information into a Web file, which PRBC charges a few of $15 to $20 to verify, or set up an automatic bill-payment system through your bank or credit union and have the records sent to PRBC.

The reports generated by PRBC also include data from RentBureau (www.rentbureau.com), a new company that collects rental histories from about four million apartment units.

Until the new scores catch up, the best way to get credit if you don't have a history is to apply for a secured card at a site such as Credit.com or CardTrak.com, says Dave. To obtain such a card, you have to make a deposit equal to your credit limit.

Secured cards generally charge high interest rates and an annual fee, but after paying your bills on time for about a year, you may qualify for unsecured status and get better terms on a traditional credit card. Just remember to steer clear of secured cards that charge initial setup fees.