If you rent (and make on-time payments) you should use that track record of good behavior to your advantage to help build your credit. Those on-time payments can help you build and improve your score. But you have to make sure the payments are reported properly. Here’s what you should know.
How It Helps
If your positive payment history is reported to the three major credit bureaus, it will then be used by the credit models — FICO and VantageScore — to show lenders your creditworthiness. The payments will show an ability to handle bills, which in turn shows you can take on additional credit. Both the latest FICO and VantageScore models will factor rent payments into their data, but you need to do a bit of work to make sure that’s happening.
- Experian Boost. One of the easiest ways to add your rent payments to your credit report is through Experian Boost. The free product from the credit reporting company is pretty straightforward: You simply add your bank account info to Boost, and it then searches your eligible payments. Once it locates your rent payments, you’ll verify the item and then it’s added to your credit report.
- Reporting Services. There are other rent reporting services too. However, many charge a fee, so if possible, use a free service as your first option. Some services that charge include Rent Reporters ($94 enrollment fee, then $9.95 per month) and Rent Khamra ($75, then $8.95). Both of those report your rent payments to TransUnion and Equifax.
- Landlord Help. Before you sign a lease for an apartment, check to see if your landlord has opted into a rent reporting service. If they have, all the work is already done. Not only that but the landlord reporting service is typically free to you.
Do One Thing: Ask your landlord about rent-reporting. If they offer it, sign up. If not, find a service and add your rent payments to your credit report.