Paying rent alone does not help you build your credit. For a long time, only homeowners paying their mortgage could benefit from paying their mortgage on time. Now renters have the same option! However, reporting rent to credit bureaus isn’t as easy as making the payments. Here are some tips on how to report your rent to these bureaus in an easy step-by-step guide.
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How do rent payments affect your credit score?
Rent payments only affect your credit score if they are included in your credit report information. When credit scoring companies do receive this information they can handle it in a variety of ways.
Depending on if your credit score is coming from FICO or VantageScore, it affects whether this information is heavily weighted. For example, VantageScore does make rent payment history affect your credit score. Whether only some versions of FICO, such as FICO 9 and FICO 10, consider this information.
Guide on reporting rent to credit bureaus
Unfortunately, one cannot self-report to credit bureaus. By reporting rent to these bureaus a third party must be involved. There are two types of third party credit reporting: independent services and landlord enforced services. This guide, explains step-by-step how to start this process and dictates what service is best for you.
Talk to your landlord if they use a rent-reporting service
Some landlords already enforce a rent-reporting service so it is important to speak with your landlord first. Typically, these services are paid by management and have no additional cost. These services require the landlord to sign-up and usually start collecting rent payment information once the apartment lease is verified.
Things to look for in independent services
However, not all landlords utilize a rent reporting service. If this is the case, you may want to look for an independent rent reporting company. One should look into the services criteria and dictate which plan would be best suited for them. Here are some things to consider prior to choosing a service:
- Fees: These services usually include an enrollment and monthly fee. Before committing to a plan dictate what is a reasonable fee for your personal budget. Additionally, calculating how much the service would cost for a year could be a good indicator if this plan is suited for your needs.
- Credit bureaus reported to: Not all services report to all three credit bureaus. Look to see which bureaus they report to if not all three.
- Accessibility: How accessible is this service’s reporting? Additionally, find out if the service provides free access to your credit scores.
- Speed of reporting: Try to find how quickly these services report to the credit bureaus. Moreover, some offer expedited reporting for an additional cost. This can help you set your expectations on how this additional information can affect your credit score on a timely basis.
- Historical rent reporting: It is common for these services to report your past payments. If you have a good long history of on-time payments, this can help improve your score.
- What happens if I break my lease: In the unfortunate event that you break your lease, find out what would happen regarding these rent reports. If a dispute happens, find out whether the service would consider the rent as a nonpayment.
It is important to note that some services will still need to involve your landlord so that they can verify your rent payments. Notify your landlord if the service requires their involvement.
Choose a rent-reporting service
After evaluating what your budget is and what you are looking for in a service, it is easier to find a rent-reporting service that aligns with your needs. A few low-cost rent-reporting services include companies like CreditRentBoost, Pinata, and CreditMyRent.
However, if you are looking for the best credit bureau coverage and value look into companies such as LevelCredit, RentReport, or RentalKharma. These are some examples of where to start in order to find the best suited service for you.
Know your next steps
Once you have chosen your rent-reporting service, know what to expect. This may include notifying your landlord on their involvement with rent verification or the additional fees that may be involved with this service. Moreover, some services may need some additional information from you.
How to build your credit
Reporting your rent is a great way to build credit. However, understanding how a credit score is calculated and being strategic with your credit is crucial if you want a solid credit score! The best rule of thumb is always to make on-time payments with at least the minimum amount owed.
Can I self report rent payments to credit bureaus?
Unfortunately, you cannot self report rent payments. However, you can choose from independent services to help assist you in reporting to credit bureaus.
Do apartment leases show up on credit reports?
Rent payments can show up on your credit report if reported. They would affect your credit and show up similarly to a loan.
Can I check my rental history for free?
After March 23, 2020, tenant databases are now available for public access. You are able to access your information after 14 days once requested.