Mastering the Art of Rebuild Credit: Insights into Using Rent Payments
If you find yourself with little to no credit history, you might wonder if there’s anything else that can positively impact your credit score, or rebuild credit, like reporting your rent payments to the credit bureaus. As it turns out, rent payments are one such thing that can help you build a better credit report. Rent-reporting services offer the chance to have your timely rent payments reported on your credit reports, which can help to boost your credit scores.
Can rent payments build or rebuild credit?
Rent payment information will be included in credit reports by Equifax, Experian, and TransUnion if they receive it. Ultimately, your credit score is based on the information in your credit reports.
FICO and VantageScore, two major credit scoring companies, handle rental payment information differently. While older versions of FICO do not include rental information in calculating scores, newer versions, such as FICO 9 and FICO 10, do.
If you’re looking to boost your credit score through rent payments, it’s crucial to ensure your payments are on time. Making timely payments and keeping a consistent payment history are key ways to rebuild credit scores over time.
You can also take advantage of certain rent-reporting services that submit your rental payment information directly to the credit bureaus. This can help ensure that your rent payments are accurately reported and tracked, giving you a better chance of improving your credit score.
By taking advantage of rent-reporting services, renters can establish a positive payment history with the credit bureaus, which may help to boost their credit scores. It can also make it easier for them to obtain financial products such as loans and mortgages in the future.
Which services will report your rent payments?
Fannie Mae recently launched a Positive Rent Payment pilot program, allowing landlords to report tenants’ on-time rent payments to credit bureaus. Fannie Mae will reimburse the vendors—Esusu, Jetty, and Rent Dynamics—so that no costs carry over to renters.
Piñata offers renters a free service that reports to TransUnion. However, Pinata will report your rent payments to all three major credit bureaus if your landlord is part of their partnership program.
Services renters can purchase to report rent payments
With Rent Reporters, you’ll pay a one-time enrollment fee of $94.95, covering up to two years’ worth of your reported rental payments. There are also flexible options for long-term users who want to save money: choose from either the monthly plan ($9.95 per month) or an annual plan ($7.95 per month). With this service, your rental history will report to TransUnion and Equifax.
Another option is Rental Kharma. The initial setup is just $50, and the service costs a convenient $8.95 per month. This service will include all your past rental history at your current address in the report, plus you can add your roommate or spouse for an additional fee of $25 plus $5 per month. This service allows your rental history to report to TransUnion and Equifax.
Services landlords can pay for
Renters may take advantage of the above rent reporting services, regardless of location. In some instances, when renters sign a lease, they can be auto-enrolled in this free service if their landlords or property managers choose to opt-in. That said, the following rental payment reporting options are only available when the landlord allows them.
PayYourRent: This service is provided to landlords, property managers, and tenants at no cost. You can use the system to pay rent online or by check. Additionally, PayYourRent reports payment information directly to all three credit bureaus, so your rental payments will impact your credit score.
ClearNow: This service allows you to make rent payments online or by check. Landlords and property managers pay a one-time setup fee, but the service is free to tenants. Payments report to Experian with this service, so your rental payments will impact your credit score.
Can reporting rent payments build or rebuild credit?
Yes, you can use rent-reporting services to help build your credit. By reporting your rental payments directly to the credit bureaus, these services allow you to demonstrate your payment history and contribute positively to your credit score. It is important to note that reporting rent payments does not guarantee a specific result, so it is wise for consumers also to use other strategies to build credit, such as utilizing secured credit cards or becoming an authorized user of a credit card account in good standing.
Reporting rent payments can be a great way to build or rebuild credit and improve your overall financial profile. There are several services available that offer reasonable costs and report to the three major credit bureaus. If you’re looking for an easy way to demonstrate good payment history and boost your credit score, consider taking advantage of rent-reporting services. It could be the key to unlocking your credit potential.
No matter what service you choose, it is essential to ensure that your rent payments are reported consistently and on time to get the maximum benefit. With the right service, your reliable rental payments can help you build a solid credit score and pave the way for a more secure financial future.
