Banking and Finance

Does Rental History Affect Your Credit Score?

July 27, 2021

If you're like most people, your credit score is important to you. You probably also know that paying your bills on time and keeping your debt low are important factors in maintaining a good score. But did you know that your rental history can also play a role? 

In this quick guide, we'll explore how rental history is factored into your credit score and what you can do to make sure it's as positive as possible. We'll also offer some tips for improving your credit score if it's not where you want it to be. Keep scrolling to learn more.

Do Rent Payments Show Up on Your Credit Report?

There's a lot of confusion out there about rent payments and credit reports. People often wonder if their rent payments show up on their credit report, and the answer depends. 

In most cases, your rent payments don’t automatically show up on your credit report. Typically, what shows up on your credit report in terms of payments includes payments made to pay off debt. This includes:

  • Credit card debt
  • Auto loan payments
  • Student loan payments

In some cases, rent payments may be reported to credit bureaus by your landlord or property management company. However, this is typically only the case if you’re severely behind on your rent payments (in the worst-case scenario) or have requested that your landlord report your rent payments for you (in the best-case scenario).

Does Paying Rent Build Your Credit?

If you’re looking for fast ways to build credit then you’re in luck. Reporting your rent to the major credit bureaus is a great way to almost immediately boost your credit score by up to 35 to 50 points in as quickly as 15 days (note that the actual boost will depend on your current credit score and overall financial health).

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How does that work, though? The main factor in determining your credit score is your payment history, so rent payments will only help to improve your score if you have a good track record of making them on time. 

If you're looking to improve your credit score even faster, you might want to focus on other factors such as paying down debt and keeping your credit utilization low. However, if you have bad credit or no credit, reporting your rent is a great way to quickly and easily boost your score without needing extra cash to pay off debt.

How to Get Your Rent Reported

While there's no guarantee that your landlord will cooperate, there are a few things you can do to increase the chances that they’ll agree to report your rent to the credit bureaus.

First, try to find a landlord who is already reporting rent payments to the credit bureaus. Not many landlords automatically do this, but if you ask during the rental application process, you’ll be able to get a good idea of whether they do or not (and if it sounds like they’re willing to do so!).

Additionally, make sure to keep a good payment history with your current landlord. This will make it more likely that they'll be willing to report your payments in the future. Finally, you can always try asking your landlord if they'd be willing to start reporting your rent payments; it never hurts to ask.

If they don’t want to report your rent for you, you can always use a third-party service to report your rent payments yourself. Plenty of apps and platforms allow you to easily report your rent to all three major credit bureaus (including Cheese as soon as we launch our rent reporting feature in December 2022).

Let your landlord know that you’re considering signing up for a service like this and that you might need a copy of the contract or other information from them. However, make it clear that they don’t have to do anything aside from providing you with the information you need.

How long does it take to build credit this way? As mentioned above, most people see a boost in as quickly as 15 days. However, how fast you build credit and the amount your credit score goes up ultimately does depend on your overall financial picture, though.

Do Late Rent Payments Go on Your Credit Report?

“Is rent even included in my credit report?” you might be thinking. The answer? It depends. As mentioned above, rent payments aren’t automatically included in your credit report.

A credit report includes information on everything from where you live to how often you pay your bills on time. The report also may include information about your creditworthiness.

In some cases, it’ll also include personal information such as any criminal convictions along with your rental history and eviction history. Note that while it may include information regarding your rental history, you have to specifically request to have that reported (via a third-party app or platform like Cheese).

However, if you are extremely behind on your rent payments then, yeah, your landlord might report that to the credit bureaus as they send your rent payments to collections. When is rent considered late

In most cases, rent is considered late if it's not paid by the end of the grace period. The grace period is usually three days, but it can be longer or shorter depending on your lease agreement. If you don't pay rent by the end of the grace period, your landlord may charge you a late fee. 

In some states, landlords can also begin the eviction process if rent is late. However, most landlords will work with tenants to make arrangements if they're having difficulty paying rent on time.

Acceptable Reasons for a Late Rent Payment

We know that sometimes you just can’t avoid paying your bills late. Things happen and sometimes there simply isn’t enough to go around. If you find yourself in that situation then take a deep breath. Paying your rent late once or twice isn’t likely to affect your credit rating or even show up on your credit report.

Simply reach out to your landlord to explain what’s going on. Acceptable reasons for late rent payment include being out of town and forgetting to send the check, family emergencies, unexpected financial emergencies, and illness or injury.

Does Breaking a Lease Hurt Your Credit?

When it comes to breaking a lease, there's no definitive answer in terms of how it will affect your credit score. If you're able to pay all outstanding charges before moving, including any back rent and fees, then breaking a lease shouldn't harm your credit. 

However, if breaking a lease results in unpaid debt, then it could damage your credit score. The best way to avoid this is to talk to your landlord and see if there's any way to come to an agreement that doesn't involve breaking the lease. If not, then be sure to budget carefully and make sure you can cover all the costs associated with breaking the lease before you decide to do so.

What about eviction? Does an eviction go on your credit report? Unfortunately, yes. Evictions do show up on your credit report. How long does that bad rental history stay on your record? It’s the same as other negative marks in that an eviction stays on your credit report for up to seven years.

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Build Your Credit With Cheese Rent Reporting

Rent is very important when it comes to calculating your credit score. It may hurt your credit if you don’t pay rent on time or have been evicted. However, it can also be a great tool to help you build your credit if you get on-time rent payments reported to the credit bureaus.

Want to start reporting your rent to benefit from the boost in your credit score? Sign up to be one of the first ones to access this new feature!