How to Boost Your Credit by Simply Reporting Your Rent
Did you know that the average credit score in the US is 716? According to most credit scoring models, that’s just a “good” credit score. If you’re looking to boost your credit score up to excellent or have a credit score that falls below the national average, there are various ways you can increase your score.
One easy way to do so is by simply reporting your rent. Believe it or not, this small act can make a big difference in your credit rating. So if you're looking for a simple and effective way to improve your credit score, follow these steps to start reporting your rent payments.
What is Rent Reporting?
Rent reporting is the process of reporting your monthly rent payments to a credit bureau. This can help boost your credit score, which may make it easier for you to qualify for loans or other forms of credit in the future.
In order to be eligible for rent reporting, the only requirement is typically that you make your payments on time and in full each month. You may also need to provide documentation, such as a lease agreement, to prove that you’re renting a property.
How Rent Reporting Helps You Build Credit
Does paying rent build credit? It could do! If you're looking to build credit, rent reporting may be a good option for you. As mentioned, rent reporting is when you report your rental payments to a credit bureau. This can help you build credit because it shows that you're making regular, on-time payments. Additionally, it can help improve your credit score if you have a limited or no credit history.
There are a few things to keep in mind if you're considering rent reporting, though. First, make sure your landlord is okay with it. They may need to sign a release form allowing you to report your rental payments. Second, check to see how you’ll report those payments. Unlike credit card payments and student loan payments, these payments don’t get automatically reported to the credit bureaus (but more on that in a bit).
Finally, keep up with your rental payments! If you don't, it could damage your credit score instead of helping it. If you're cautious and diligent, though, rent reporting can be a great way to build credit.
Who Benefits From Rent Reporting
The two most prominent groups of people that benefit from rent reporting are people who:
- Have little to no credit history
- Have poor credit
If you’re young or haven’t ever taken on any debt in the form of a credit card or loan then you might not know how to start building credit. While credit builder credit cards and loans exist, reporting your rent payments is a super risk-free way to start.
Likewise, if you have poor credit due to a high debt-to-income ratio or if you have trouble keeping up with your credit card payments simply because paying rent is more important then go ahead and report your rent.
Basically, any way in which you can demonstrate that you’re financially responsible can help you boost your credit score.
How to Report Your Rent
Unfortunately, unlike your monthly payments and credit utilization rate, your rent payments don’t automatically get reported to all 3 credit bureaus. Instead, you have to manually report your rent payments.
And (yet again, unfortunately), there’s no way to directly report your rent payments to credit bureaus yourself. You’ll have to go through third-party platforms. Here are a few of those platforms for rent reporting services.
Experian RentBureau is a national rental reporting service that helps landlords and property management companies report rent payments from tenants to Experian.
As long as the company or person you’re working from is registered with Experian RentBureau, you’re eligible to report all of your rental payment information to Experian via the platform so that it can be incorporated into your credit report with the bureau.
However, if your landlord doesn’t report through RentBureau then you can register for a rent payment reporting service (note, these have fees!). This includes Cozy, PayYourRent, or RentTrack.
Wanna report your rent to TransUnion? Try Rental Kharma. However, to be eligible for this rent reporting service, you need to be renting from:
- The property owner
- A property management company
So, if you’re subletting, for example, you won’t be eligible to report to Rental Kharma. Likewise, if you’re not on a lease and are paying rent to a family member, you also won’t be eligible to report your rent.
As long as you meet the qualifications, Rental Kharma verifies your payment and rental history with your landlord or property manager and will also include six months of prior rental payments on your report.
The initial fee to use this service from Rental Kharma s $50 with a subsequent fee of $8.95 per month.
We’ve touched on how to report rent to Experian and TransUnion, but what about Equifax? You can use RentReporters to report your rent payments to Equifax (and as a bonus, they’ll also report it to TransUnion, making this a potentially more cost-effective option).
The RentReporters platform tracks rental payments by communicating directly with your landlord so they’re able to verify that your payment was made on time.
Do note that this is the most expensive platform on this list. The initial fee is $94.95 and the subsequent monthly fee is $9.95. However, with that initial fee, you get access to two full years of previous rental data and reports.
Build Your Credit With Rent Reporting
Rent reporting is a great way to build your credit. By including your rent payments on your credit report, you can improve your payment history and credit score. This will make it easier to qualify for loans and get the best interest rates.
Looking for other ways to build credit? We’re here to help.
We’ve worked hard to bring you fee-free financial products in the past and we’re still working behind the scenes to bring you more products that can help make your financial life easier. Stay tuned to learn more about how you can improve your credit score with Cheese.