+1 for credit card. Even if you have to get one with a high interest rate, you can pay it off each month and never pay a dime in interest (this is what I do). As your credit improves you can ask them to increase your limit (just don't do that more than once a year or so).
Citibank offers free credit score reporting with some of their cards. They report in each month and they pretty accurate +/- 20 pts.