Nearly 43 million households—nearly 36% of the United States population—is made up of renters. Most of these households pay their rent responsibly and on time, but that track record of on-time payments has historically not been reflected in their credit history. That’s beginning to change due to newer credit scoring models that use rent payment info in the calculation of credit scores.
Consistently paying your rent on time can help improve your credit score. A 2017 study by Experian and the City of New York found that 76% of renters who reported their payments experience a boost to their credit score. However, rent payments are rarely reflected in most people’s credit histories.
In this article, we explain how you can—and why you should—start reporting your rent to credit bureaus.
How rent affects your credit score
Your credit history makes up 35% of your credit score, and it can have a big impact on your financial milestones, like getting a mortgage, an auto loan or a credit card. The three main U.S. credit bureaus, Equifax, Experian and TransUnion, collect information on how well you meet payment deadlines, which is why paying rent consistently and in full can effectively increase your credit score. Reporting your rent is particularly beneficial if you have a minimal credit history, like if you’re just starting to build your history or if you recently filed for bankruptcy.
It’s becoming more common for landlords to report their tenants’ rental history to credit bureaus, but it’s yet to be considered standard practice. So if you’re interested in improving your credit history or simply want to receive due credit for being a responsible renter, there are a few ways you can report your rental payments to credit bureaus.
Talk to your landlord
It’s possible your landlord is already reporting your rental payment history through services like Experian RentBureau to encourage on-time rental payments and help you build their credit history.
Remember, however, that even if your landlord uses Experian RentBureau, that doesn’t mean the other credit bureaus, Equifax and TransUnion, will receive your rental payment history. In order for all three major credit bureaus to have your rental payment history, you might need to report your history yourself.
Contact rent payment services
There are services that can report your rent payments to the three major credit bureaus for a fee. Some of the most common options include:
RentTrack. This service reports to all three credit reporting agencies. If your landlord doesn’t use RentTrack, they’ll collect your rent for a $6.95 fee and then send a check to your landlord.
ClearNow. This service will take your rent from your checking or savings account. While there’s no cost to tenants, your landlord must sign up for ClearNow. If you opt in, your payments will be reported to Experian, one of the three main credit bureaus in the U.S.
PayYourRent. This service reports to all three major credit reporting companies. Fees dependent on how you choose to pay your rent.
Cozy. This service is free to renters; landlords pay $9 a month per unit to receive auto-payments from tenant bank accounts, which are reported to Experian.
While the services above charge a few that applies to you and/or your landlord, if you want a cost-free option, you can try Experian Boost, a service that links with your bank account to report utility and phone service payments. Keep in mind that this service only reports scores to Experian.
Other ways to improve your credit
Reporting your rent payments to credit bureaus can certainly help increase your credit score; however, there are other ways that you can boost your credit rating:
- Make any payments you owe on time, from car payments to student loans, medical bills, utility bills and credit cards
- Pay your debts on time
- Maintain a low balance on revolving lines of credit
- Consider becoming an authorized user on someone else’s credit card
For more resources on how to navigate your new life in the U.S., visit Nova Credit’s resource library where you can learn about everything from renting an apartment to finding the best credit cards for noncitizens.
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