Banking and Finance

Does Paying Rent Late Affect Your Credit Score?

July 27, 2021

There's a lot of mystery surrounding credit scores for many people as most of us aren’t taught about how credit works or what credit scoring models are in school. 

In fact, about 40% of Americans don't even know what their credit score is, and many more don't understand how it works.

One common question is whether paying rent late affects your credit score. Today, we're going to clear that up for you. First, let's take a look at what goes into your credit score, and then we'll explore the impact of rent payments on it. 

Spoiler alert: Paying rent late can only hurt your credit score in certain situations, but there are ways to mitigate the damage. Keep reading to learn more!

Does Paying Rent Late Affect Your Credit Score?

Let’s start by ensuring you understand what does affect your credit score.

Factors That Affect Your Credit Score

One is how well you manage your credit, including paying bills on time and keeping your credit utilization low. Payment history accounts for 35% of your credit score, amounts owed account for 30%, and credit utilization accounts for roughly 10%.

Another factor is the length of your credit history. Generally, a longer history shows that you have consistently managed your credit well. 

The types of credit you have can also affect your score, as having a mix of revolving credit (like credit cards) and installment loans (like mortgages or car loans) can show that you can handle different types of debt responsibly. 

Finally, the number of recent inquiries into your credit can also play a role, as too many in a short period can signal potential financial trouble.

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Do Late Rent Payments Affect Your Credit Score?

Does all of the above mean that paying rent late affects your credit score? The short answer is no. Unlike mortgages or credit card payments, rent payments typically aren't reported to the major credit bureaus (unless you're in a rental finance program). However, that doesn't mean that paying rent late won't have an impact on your credit score. 

Here's how: If your landlord takes you to court for unpaid rent, it can result in a judgment on your credit report, which will lower your score. Not to mention, being evicted also takes a toll on your credit score and may make it harder for you to find future housing. 

So while missing a rent payment doesn't necessarily affect your credit score directly, it can lead to negative consequences that will ultimately hurt your financial health.

Do Landlords Report Your Late Rent Payments?

What happens if you can't pay your rent on time? Does your landlord automatically report one missed payment to every major credit bureau? Honestly, that rarely ever happens unless the situation gets out of hand.

It’s not likely that a landlord will report late rent payments to any credit bureau if you’ve just missed one or two payments.

FAQ: Can a landlord ruin your credit score? It’s highly unlikely that they would ruin your credit score as many factors affect your credit rating. Keep in mind that rent payments aren’t traditionally reported to credit bureaus unless you have a seriously delinquent rental account or requested that your landlord report your rent payments for another reason.

What Happens If You Pay Your Rent Late?

So, you forgot to pay rent. What happens now? While it’s highly unlikely that your landlord will immediately report that one rent payment to any credit agency, there might be other consequences.

Aside from potentially incurring late fees, paying your rent late can affect your relationship with your landlord and potentially make it harder for you to find future housing. Landlords rely on timely rent payments to maintain the property and pay their bills, so a late payment can cause them stress and frustration. 

In some states, they may even be able to legally evict you for being consistently late on rent. Additionally, if you have a history of not paying rent on time, it may be difficult for you to find another rental that is willing to approve your application.

FAQ: Does being late on rent affect credit? It usually doesn’t, no. However, if you’ve requested that your landlord report your rent to credit bureaus or if you’re using a rent reporting service then it could negatively affect your credit score.

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Does On-Time Rent Payment Help Build Your Credit Score?

In short, yes! On-time rent payments can boost your credit score (and fast). However, landlords won’t automatically report rent payments to credit bureaus, which is why they don’t typically show up on your credit report.

To ensure that your rent payments are reported, you’ll need to sign up for a rent reporting service. By signing up for rent reporting, your monthly rent payments will be reported to credit bureaus, boosting your credit score and showing potential landlords or lenders that you are responsible for your finances. 

And signing up is typically super easy! Just gather all of your lease information and contact information for your landlord, and choose a rent reporting service provider. Your provider will handle the rest, sending notifications to your landlord to confirm details and getting you added to their system. 

It's truly that simple. So why wait? Sign up for a rent reporting service today and start getting the credit you deserve. Not sure which rent reporting service to choose? Keep scrolling!

Report Your Rent Payments With Cheese

We hope this article has helped you understand how late rent payments can affect your credit score and what you can do to help improve your credit rating. If you make on-time rental payments each month, however, requesting that those be reported to the credit bureaus is a great idea.

Not sure how to do that without adding too much stress or hassle to your life? Cheese is here to help with our rent reporting service that will make sure your on-time rent payments are reported to the major credit bureaus. 

For a one-time fee of $49, we will not report up to two years of your rental history; for or a monthly fee of just $5, we’ll report your future ongoing rent payments to all 3 credit bureaus. Most users find that (depending on their credit score and other financial factors), this can boost their score by 35 to 50 points in as quickly as 15 days.

Sounds like a good deal? Sure it is! Keep up with Cheese, we’ll bring you the best rent-reporting service very soon.;)