Does paying rent build credit? Yep, not only can you report your rent to build your credit but it can potentially be incredibly beneficial for your financial future.
An analysis from TransUnion found that with the inclusion of rent payment in a credit report, credit scores improved greatly in approximately 9% of consumers, and 12% of consumers jumped to a higher credit score tier.
Sounds great, right? It can be highly effective, so sit tight and keep reading to learn all about how to report your rent to credit bureaus and what your options for reporting services are.
How Rent Reporting Helps Improve Your Credit Score
Did you know that by reporting your rent payments to a credit bureau, you can give your credit score a boost?
That’s right. Rent reporting gives rental payment history the same weight as other bills such as utilities and credit cards. This means that consistently making your rent payments on time can have a positive impact on your credit score.
Who benefits from this the most?
- Those who are just starting out may not have much of a credit history.
Renters with limited or no credit can use their rental payment history to demonstrate responsibility and improve their ability to qualify for loans and mortgages in the future.
- Those who have bad credit.
Rent reporting is also beneficial for them to rebuild their credit because rent reporting may have a drastic and instant impact on credit scores.
So next time you sign a lease, make sure to ask about rent reporting and take advantage of this opportunity to build up your credit. Or, speak with your landlord now to see if they already have a rent reporting process set up so you can join.
Can You Report Rent by Yourself?
Being a renter, it's important to know whether or not you can report your rent payments on your own. In fact, you’re not able to report those payments directly to the credit bureaus. For that, you’ll need to sign up for a rent reporting service.
How do you do that?
Each month, make sure to save any proof of payment, such as a receipt or bank statement showing the transaction. Then, sign up for a rent reporting platform. They’ll require you to provide them with some personal information, including information regarding your lease agreement.
After the initial setup, though, they’ll automatically monitor and report your on-time rent payments each month. Depending on the service you choose, they might also report rental payment history of up to two years in the past (if you can, definitely opt for this upgrade!).
Can Your Landlord Report Your Rental Payments?
As a renter, it's important to stay on top of your rental payments and make sure they're being reported accurately through a rent reporting company.
But can your landlord actually report these payments to credit agencies? They also can’t report rent payments directly to credit bureaus. They can, however, sign up for a rent reporting platform and report rent payments for all of their tenants.
What will they need to do that?
They’ll be required to provide the name and information of the tenants they have under lease. Typically, they’ll also be required to show proof of the lease along with proof of ownership of the property.
Overall, rent reporting companies rely on landlords to provide accurate and timely rent payment information. This means that landlords need to make sure they are regularly submitting their tenants' rent payments to the rent reporting company.
In addition, they should also ensure that any rent adjustments or late fees are accurately reflected in the reported information. If your landlord is failing to include this important information, be sure to check in with them so your credit report updates correctly.
Which Credit Bureaus Accept Rent Payments?
All three major credit bureaus will accept rent payments as valid credit report information if they receive it. However, this doesn’t mean that all rent reporters submit rent payment history to all 3 bureaus. Typically, even the best rent reporting services only report to TransUnion and Equifax.
Looking for rent reporting companies that report to all 3 credit bureaus? Currently, Esusu Rent and Boom are the two best options. In addition, Cheese is also launching its rent reporting service in December 2022.
Our service will allow you to report up to two years of rental history as well as all of your future ongoing rent. With just a $49 one-time fee for the rental history reporting or $5 per month for the future ongoing rent reporting, Cheese is definitely one of the most cost-effective options.
What Services Can Report Your Rent Payments
Does your bank report your rent payments? Or is it a platform that monitors your budget and spending such as Mint? Nope. There are special rent reporting companies that will report your rent payments for you.
What should you expect from rent reporting services? Typically, you’ll have to pay a one-time fee to set up your account. Then, most rent reporting platforms will also charge a monthly ongoing fee to help cover ongoing rent reporting services.
At Cheese, we offer similar pricing. You have two options. You can pay a one-time fee of $49 to have us report up to two years of your rent.
We also offer a monthly subscription option for just $5 per month (Credit Rent Boost is the next cheapest service at $5.95 per month, but most hover between $6.95 to $9 per month). When you opt for the monthly option, we’ll report your future ongoing rent payments for as long as you subscribe.
While most rent reporting companies report your rent payments in a similar way, there are a few things you should look for when choosing the best rent reporting company.
- They should make it easy for you to report your rent payments to the credit bureaus. This means providing an easy way for you to input your rent information, whether it's through a website or an app.
- They should also provide regular updates on your rent payment activity to ensure that all rent payments are accurately reported.
- They may offer additional helpful features such as rent payment reminders or landlord tracking tools.
Choose a rent reporting service that offers all of these features and more, and see how reporting your rent can improve your credit score.
Let Cheese Report Your Rent Payments
Looking for the best rent reporting service? We’re launching our service in December!
Through our easy-to-use service, we will report your ongoing rent payments and up to two years' rent history, which has the potential to instantly affect your credit score. While the impact on your credit score may vary (as many other factors affect your credit score), the average improvement is between 35 to 50 points.
Stay tuned! Cheese will bring you the best rent reporting experience very soon.
