How Debit-Based FinTech Turns Everyday Spending (and Rent) Into Credit History

Building credit can feel like a catch‑22—especially if you’re starting from scratch, rebuilding, or living debt‑free. In this episode we sit down with James Yendrey of InvestMentor^SM to unpack the new wave of “credit‑adjacent” products that can report debit spending, rent, and utilities to the credit bureaus—plus the risks to watch for, like fees, incomplete bureau reporting, and transaction reversals.

Mary MacNamara

Hello everybody, and welcome to the Cent of Security Podcast. So, for many consumers, building credit is one of the biggest financial hurdles, especially if you’re starting from scratch or trying to recover from past mistakes. Traditional credit cards require a credit check. Interest can add up quickly, and one misstep can hurt your score.

For years, in recent years, a new wave of FinTech companies has promised an alternative build credit without a credit check. Without interest and sometimes without even borrowing money at all. Products like Extra turn, everyday debit spending into reported credit activity. While newer rewards programs like Bilt are now extending points to payments like rent and even mortgages.

So today with James Yendrey of InvestMentor^SM, we’re breaking down how these tools work, who they’re designed for and notes to consider when using them. Hi James. How are you?

James Yendrey

I am good, Mary, how are you?

Mary MacNamara

Good. Okay, so before we get into the weeds on this and into specific products, can you explain why building credit is so difficult for many people today?

James Yendrey

Sure. Traditional credit system is like a paradox. It’s fundamentally a paradox, right? You need credit history to get credit, but you can’t get credit until you’ve built history. So, it’s like a catch 22 scenario, and it becomes economically inefficient, right? When you have millions of people who are theoretically financially responsible, who pay bills on time, paying rent and utilities and phone bills and things like that.

It is just not necessarily calculated into the overall credit equation, and it becomes difficult when credit requires borrowing. Traditional credit building means you’re taking on a debt load, right? Credit cards, auto loans, mortgages. If you prefer living a debt free, paying cash for everything, you’re invisible.

Or you have a thin credit profile in the credit system.

Mary MacNamara

All right, so what’s fundamentally different about these new debit based “credit adjacent” products compared to traditional credit cards?

James Yendrey

Fundamentally, you’re not borrowing money, utilizing tools like the Extra card or the Fizz card or some of these other cards. They’re using your own funds. Effectively what’s happening is the platform reports the activity to the credit bureaus, but it’s a debit card that allows you to only spend what you have. So, you’re not borrowing from a bank or an agency or anything. There’s no interest because you’re not occurring any debt. You’re literally only spending what you have and they’re reporting it to the bureaus.

Mary MacNamara

So, when a company says it helps build credit without a credit check, what does that actually mean in practice?

James Yendrey

It could mean no hard credit inquiries, so they’ll they don’t pull your full credit report. So, there’s no impact to the score where traditional credit cards will have hard pulls, that’ll temporarily bring your score down. The alternative available credit criteria instead of, credit worthiness, they may check bank statements, do bank statement loans.

Mary MacNamara

Okay, so we’re also seeing rewards layered into essential payments like rent and mortgages. Why is this such a big shift in personal finance?

James Yendrey

This is huge because it turns unavoidable expenses into, some financial assets, right? It becomes meaningful when an individual pays about $20,000 a year on rent that has historically not been reported. You had mentioned Bilt, take that for example. So, say you are a 20-year-old that goes out and goes out on your own and rents an apartment.

Median apartment ranges between, 3500 to 1900 depending on metropolitan areas. So, we’ll call it 1500. So that’s $18,000 a year. That goes typically unreported. Now using a platform like Bilt will take those payments and start to report it to the credit bureau. So not only are you building up a credit report where you may not necessarily have a huge report established, but it shows consistency over time.

So, think according to NAR if the median home buyer was 40 as of 2025 for the first time home buyer, you’re building up 20 years’ worth of established credit and good habits continuously.

So, you don’t necessarily need a mortgage anymore to show that you can make the shelter costs continuously on time. Now, with these, you’re also getting the rewards, so you pay on time. They’re partnering with local establishments that are allowing you to benefit from using their platform.

So, they’re leveraging those around them to incentivize you to utilize the system. They’re not really changing your behavior, so you’re not spending more, you’re not taking on debt, you’re paying rent anyways and you’re effectively laddering an incentive program and structure with it. So, you have that behavioral finance component added, layered into it.

So, it shifts the value from the lenders to the consumers.

Mary MacNamara

I really like it. I wish I had that when I was growing up, honestly, because you brought up a good point. It’s like you’re paying rent; you’re being consistent. That should count for something, right?

James Yendrey

Yeah, absolutely.

Mary MacNamara

Now here’s where it could get a little weird, is that you have roommates, right? And like in New York City, a lot of people have roommates ’cause it’s so expensive.

And so I wonder how that all works out. But that could be for another podcast. Because if there’s one person, who would be the main person, they would get the Bilt credits or whatever the platform is. Or I wonder if it’s you’re in a restaurant; you split it three ways with a credit card.

So, it’s interesting. I’m sure the dynamics of this on an interpersonal level get pretty interesting, but I think overall, I think it’s really great for, building credit.

James Yendrey

Yeah, and you could think of it this way, oftentimes if you have roommates, you guys split the bills, right? And with services like this, you can use things like Experian Boost to also track utility-based payments. So, say you do go and pay for the electricity or the water costs and because your room is smaller, maybe you’re taking less of the the burden on the overall rent, but instead you are, adjusting it onto the utilities.

That can also get reported now to the credit bureaus using these Experian things so you’re not taking on debt. It’s taking these payments that you would be paying anyway and reporting it to the bureaus to show that you are more consistent in your payments. You don’t have any late payments, and all the bills are now being utilized for you as you continue to pay them.

So, you’re now getting the positive net benefit of making all your payments on time.

Mary MacNamara

I think it’s great so let’s look at this from a different angle. If sometimes transactions are reversed, as in returns or disputed, or if there’s a hiccup in how payments are categorized, could that create confusion? Or unintended negative marks as well?

James Yendrey

Yeah, that’s a real risk. Like transaction reversals, like when you pay rent, it’s reportedly paid and come back, could create negative marks with within like technical glitches. Categorization errors could also occur saying that platform could potentially miss categorize a transaction, personal versus business, and it might not necessarily report correctly.

And not saying this is a singular product, but you have technical constraints on most products these days, and errors happen, you know it happens. Over reporting volatility, if every transaction reports immediately, any error propagates instantaneously on your credit file, and monthly reporting kind of has a built-in buffer.

So, errors can typically be caught in this, but a best practice is to use products like these. But check your credit reports monthly, quarterly, and try to catch them as early as you can.

Mary MacNamara

Yes. Monitor. Okay, so at a high level, what should listeners be asking themselves before signing up for any credit building or rewards programs?

James Yendrey

What should they ask themselves? Does it actually report to all the bureaus? Some platforms will only report to one or two of the bureaus. What’s the catch? Is there a monthly fee that’s associated with it that you may also have to budget for? How long can I wait to see impacts of it?

If you have no credit, and it typically takes about six months for this stuff to start showing up on your credit, so you have to show consistency, but that’s regardless of, whether you use these systems or not. What does it mean if I if I miss a payment or overdraft, does it report negatively? Or what are the penalties? You’ve got to understand your upside and downside risks that can I track my progress? These are things that you should be thinking about regardless of whether or not you use these tools or not. But these are good questions that you should ask yourself whenever building these profiles.

Mary MacNamara

So, some of these platforms offer 1% rewards are rewards of feature or a distraction in the credit building product.

James Yendrey

It can be both. I think it really depends on the users. If you take, we can take your previous example of Bilt, Bilt users who have a mortgage, they don’t need Bilt for anything other than the rewards. They’re already their mortgage companies already tied. They’ve had their credit checked and pulled and all the other stuff, and so they’re genuinely just tethering it to it so they can benefit from the rewards

based system. On the other hand, when you are trying to establish credit to get a house or to buy a car or whatever the case is you get the incentive of being a more financially responsible person and also, maybe a couple of dollars off your next Uber Lyft, depending on whatever the structure is.

So, it’s it helps in, in both ways in that aspect.

Mary MacNamara

Yeah, I even think it offers like coupons for, some of the local restaurants and things like that, which I think is really great, especially, when you’re starting out it all helps, right? You get a coupon for a free large cheese pizza and…

James Yendrey

I paid rent. I earned this…

Mary MacNamara

I can guilt free eat this pizza now because Bilt gave me this reward.

James Yendrey

Correct.

Mary MacNamara

I think we’re going to wrap right there, but folks, I wanted to tell you something and. James, you can mention the title and the author and everything. James and I are thinking about having a podcast on a book that we’re going to start reading.

And we’re going to just introduce this right now so that if you’re interested and you want to pick up the book too you can start reading it. And James, what’s the name of the book and who’s the author? Tell us about it.

James Yendrey

It is called Misbehaving: The Making of Behaviorial Economics by Richard Thaler. He is a behavioral economist a Nobel Laureate economist, and it’s an absolutely amazing read. It helps understand behavioral finance and really goes into the psychology behind decision making processes for most individuals.

I think understanding that is what a lot of people are missing, right? They think it’s all numbers and, you have these theories where markets are perfectly pricing in everything, but we as humans are imperfect. And we don’t make the most logical decision every time. And so, this book really dives into how those emotions are really ties to economic decisions that are made for everybody. It’s a really good read.

Mary MacNamara

Oh, that sounds really good. I’m counting on your opinion on that because I haven’t read it yet, so I’m going to be starting to, and so we’ll just do this in a few months out and we’ll probably announce it again and what I’ll probably end up doing is posting on Traders Insight, an article, and below the article there’ll be a place where people can put in questions and things.

because this is obviously not a webinar but then we can read some of the questions to try to answer them or fail miserably, but we’ll give it a shot and see how it goes. Alright, James, anything else before we close?

James Yendrey

I would say going back to the going back to the original topic before utilizing or taking on any debt I would really strongly consider, in my opinion, utilizing some of these services so you don’t take on debt and you actually get credit for being a financially responsible individual just by paying your cell phone bill, your light bill, or your rent.

That’s $20,000 a year that you are responsible for paying for it and you should get the credit for it. And so, you don’t need to take out car loans or credit cards with predatory loan fee structures just. Be a little bit smarter about the decision-making process and don’t take on needleless debt because you think you have to build it when your habits can speak for themselves in this way.

Mary MacNamara

That’s excellent. It’s really good like I said, I wish I had this when I was younger and, trying to build a credit rating because it took a while, to even get a credit card. In the old days they used to have something called the secured credit card, which is basically a debit card, but you got credit for it. But yes, this is so much better. Needless to say, all those years of paying rent and rent and rent and being able to get some credit for that would’ve been excellent. So, it’s great. That’s a positive, right? And so, we’re trying to bring up some positive things out there in the world. Anyway, thank you so much, James.

Appreciate it. Once again from Invest Mentor. Please check out Interactive Brokers Traders’ Academy, and the Traders’ Insight blog for market commentary and other podcasts such as IBKR Podcasts. We really appreciate it. Thank you so much.

James Yendrey

Thank you. Bye.