If you always check your credit report annually and are aware of your score and what affects it, then you probably have noticed things like your car payment and credit card payments on your report. But if you’re trying to improve your score and need more history or positive items on your report, what can you do without going into more debt?
The answer may be something you’re already doing – paying rent. Most people think that only a mortgage payment will show up and affect their credit, but your landlord may also be reporting your rent payments to the credit bureaus. And if they’re not, and you want them to, here’s the scoop on how to make your rent payments work for your credit score.
How Rent Affects Credit
Until recently, rent only affected your credit negatively. If you missed a payment, broke your lease, or incurred fees or costs for damages, your landlord may have reported you to collections for failing to pay. These items then appear on your credit report and stay for seven years, for all future landlords or lenders to see. But if your record is good or you’ve turned a new leaf, why shouldn’t you get credit for all of those on-time payments you made?
Rental Payment Services
Now, you can pay your rent through a rental payment service that will report your on-time payments to Experian. This allows you to build your credit history if it’s minimal or repair it if you need a boost. Landlords will appreciate this service because when they pull a prospective tenant’s credit report (like most do,) they can see rental history in addition to all of the other payments. This reporting could also help those interested in buying a home. With a more substantial history, they may be able to secure a better interest rate on a mortgage
How to Enroll
There are several rental payment services that work with Experian RentBureau, the rent reporting service through Experian, that you and your landlord can use. Some of these include ClearNow, RentalKharma, RentTrack, and PayLease. To find out if your landlord is already reporting your rent, you can call Experian to ask for a rental history report. If they aren’t already reporting your rental payments, you can refer them to the Experian RentBureau website, or if you rent from an individual landlord, you can sign up yourself with one of the rent payment services that work with Experian RentBureau, and make sure to select the reporting of your rent payments so that they are added to your credit report.