Help Your Credit by Reporting Rent Payments
Last Updated: March 31, 2017
If you don't have much in the way of credit or maybe you are trying to rebuild your credit, wouldn't it be great if your on-time rental payments were factored into your credit score? Within the last few years, more and more services have popped up that can report your timely payments to all three credit reporting bureaus. But here's the catch, the services are not free and you can not report them yourself. That means you will have to get your landlord on board with reporting your payments - which might be easy or difficult depending on the landlord and your relationship with your landlord. To use a rent-reporting service, you will need to know which ones report to which bureaus and how much these services are going to cost your landlord. Read on!
Which Credit Score Incorporates Rent Payments?
All three major credit bureaus - Experian, Equifax and TransUnion - do include rent payments in their credit report if they receive them, but less than 1% of all credit files contain rental tradelines. The most commonly used FICO score does not use rental payments to calculate your score but FICO 9, FICO XD, and VantageScore do.
Do All Property Managers and Landlords Report On-Time Payments?
Unfortunately, no they don't. Nearly 100 million Americans rent, leaving lots of room for the growth of this promising means of helping people improve their credit scores.
How are Rental Payment Histories Collected?
There are now several companies that report your rental payments. A few years ago there was only one or two companies that did this but with the growing number of people who rent, it has opened up a whole new industry. This is great news for people who are not in a position to buy a home but they do make on-time monthly payments just like someone with a mortgage. Here is a listing:
RentReporters: One-time enrollment fee of $39.99 to $59.99, which includes 2 years of reporting and then it is $9/month. They report to TransUnion.
RentTrack: They charge $2.95/month and they report to all three credit bureaus. A look-back of up to 24 months is available on your current lease.
Rental Kharma: Inital set up of $40 and then $9.95/month. When you initially sign up, you can report payments made in the previous 24 months and they report to TransUnion.
PayYourRent: Fees depend on how rental payment is paid and sometimes these fees are paid by the rental management company. This one reports to TransUnion and Experian.
ClearNow: There is no cost if you opt in for the auto-debit of your rental payments from your checking or savings account. This one reports to Experian.
How Do I Know If My Property Manager or Landlord Reports Rent Payments?
Ask. And if they don't, point out that the benefits are three-fold:
- It's a great way to reward good tenants.
- It may help deter chronically-late paying renters who know their history will now affect at least one of their credit scores.
- It's a great way to gain access to a database of renter that can prove invaluable in weeding out prospective renters.
What Are the Benefits For Property Managers or Landlords to Report Rental Payments?
In addition to rewarding the dependable tenants who deserve credit for on-time payments, property managers and landlords who report to any one of the above mentioned rental reporting companies, also reap the benefits of having access to its extensive database of renters. In other words, it's a great way for them to screen prospective renters.
So, if you are looking to rent a place or maybe you have been a renter for years, approach your landlord about reporting your payments to the credit bureaus. Not only will this help you build your credit history, there are also advantages for your landlord. Reporting on-time rental payments can be a win-win for both you and your landlord.