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- Without intervention, rent payments don't show up on your credit report, so they don't affect your credit score.
- You can use a rent reporting service to report your rent payments and other bills to the credit bureaus.
- Rent reporting has a greater impact on your credit score if you're new to building credit.
Building credit, especially rebuilding credit after damaging it, can be a slow and arduous task. This is often because the information that raises your credit score is traditionally limited to borrowed money.
This leaves most of your monthly expenses out of your credit reports, such as your rental payments, which comprise 32% of the average American's income according to Realtor.com. Yet, rent reporting services allow you to count these payments toward your credit, making borrowing more accessible. Even the best rent reporting services don't come free, but the boost to your credit score can be worth it.
How rent payments affect your credit score
Without any intervention from you or your landlord, rent payments typically have no impact on your credit score.
This makes sense when we look at how your credit score is calculated by the credit scoring models FICO and VantageScore. These scoring algorithms calculate your credit score from information on your credit report provided by your creditors, such as on-time payments and your credit utilization ratio.
Traditional credit reporting and rent
While your credit card companies or auto lenders often report your payments to the credit bureaus, your landlords don't automatically report your rent. Reporting any information to the credit bureaus, also known as data furnishing, is voluntary, and the data furnishers are regulated by the Fair Credit Reporting Act. Thus, it's often not worth a landlord's time and effort to report rent payments to the credit bureaus.
That said, you can take steps to get your rent payments reported to the credit bureaus.
Related: The best loans for fair credit »
Rent reporting services and their role
To boost your credit score with your rent payment information, you'll need to look into rent reporting services. These third-party companies will report your rent payments to the credit bureaus on behalf of you and your landlord for a monthly fee. The added information will build out the payment history on your credit reports, which makes up 35% of your FICO credit score and 40% of your VantageScore credit score.
Benefits of reporting rent payments
Potential for credit score improvement
Rent reporting services can be costly, with a hefty signup fee and monthly subscription fees. However, the boost to your credit score may be worth the money, especially if you can secure a lower interest rate with your resulting credit score.
That said, any credit-builder product, even the best credit builder loans or best secured credit cards, has limited utility once you build out your credit to a certain point. Similarly, adding rent to your credit report won't raise your credit score if you have an extensive credit history and can already qualify for low interest rates.
How to report rent payments to credit bureaus
Most rent reporting services will charge you a fee. You have two options to consider:
Sign up for a rent reporting service on your own. The rent reporting service might still ask your landlord to verify your lease and/or rent payments. You will pay any fee directly to the service. Enrollment fees vary and could be one time fee or a subscription fee each month, plus a setup charge.
Get your landlord to sign up for a rent reporting service. The service might make it attractive to the landlord to sign up by offering automatic payment collection from their tenants. You won't pay for the service directly, but your landlord might get the charge and pass it on to you or add it to your monthly rent.
Considerations and limitations
When choosing a rent reporting service, take note of the features that the service offers. Your rent reporting service should include retroactive rent reporting (reporting payments made before signing up for rent reporting), a refund policy, and three-bureau reporting. "If they only report to one of the bureaus, then they're only partially solving the problem," says Freddie Huynh, vice president of data optimization at Freedom Debt Relief and former FICO employee.
While these services sound great, Huynh says that "the reality is that there's a lot of devil in the details." For one, some services require your landlord's cooperation, which can be a nonstarter for some renters. Some of these services will even charge your landlord.
Additionally, even if your rent appears on your credit report, it may not be factored into your credit score, depending on which credit score you're looking at. For general lending purposes, most creditors look at FICO 8, FICO 9, and VantageScore 3.0. While VantageScore 3.0 and FICO 9 use reported rent in their calculations, FICO 8 does not, even if those payments appear on your report.
Tips for maximizing the positive impact of rent on credit
Once you have ensured that your rent is being reported to the credit bureaus, make sure that you pay your rent on time every month. This now becomes like any other credit account that is being reported and late payments can hurt your credit score, which would defeat the purpose.
Also, monitor your credit reports and the rent reporting service to verify accurate payment reporting.
Rent reporting frequently asked questions (FAQ)
Do all rent payments automatically get reported to credit bureaus?
No, rent is not automatically reported to the credit bureaus. You have to use a rent reporting service or make arrangements with your landlord for rent reporting.
Can reporting rent payments to credit bureaus negatively affect my credit score?
Missed payments of any kind can negatively impact your credit score and that includes rent. Making your rent payments on time is very important.
What are the costs associated with rent reporting services?
Fees vary depending on the company that you choose and may include a setup fee and monthly fee.
Can you pay rent using a credit card?
Yes, you can pay rent using a credit card. That said, this comes with several downsides, including interest accumulating on your debt and potential processing fees landlords tacked onto your rent payments via credit card. On the other hand, paying your rent with a credit card can help you earn rewards. For example, the Bilt Mastercard® earns points when you use it to pay your rent (up to $100,000 annually) with no additional fees. These points will go a long way toward saving money, provided you're mindful about paying off your monthly credit bill.
Should I pay for rent reporting?
While rent reporting can be worth the money, you may not necessarily have to pay for it yourself.Experian Boostrecently added rent to the growing list of payments it will add to your credit report, including utility bills and streaming service subscription fees. Additionally, you can ask your landlord if they'll consider signing up for rent reporting for their tenants or if they're already enrolled.
Does rent reporting require landlord approval?
You don't necessarily need your landlord's approval to use a rent reporting company, though their cooperation may be necessary depending on the service you choose. When you select a company to use, make sure you understand the terms of service.
Senior Personal Finance Reporter and Spokesperson
Jennifer Streaks is a Personal Finance Expert and Journalist who writes about credit and all things money for Business Insider. Committed to financial literacy and economic empowerment, she has covered financial topics for over a decade, writing about her own experiences and sharing her expertise to give consumers actionable financial advice.Along with exploring credit scores, credit reports, and how to build credit, Jennifer analyzes how current economic trends impact everyday people and offers her expert advice on budgeting, saving, and growing wealth in today’s economy. She regularly appears as an on-air financial commentator on programs like Good Morning America, Yahoo! Finance, CBS, and MSNBC.ExperienceBefore joining Business Insider, Jennifer was a financial contributor for CNBC and covered personal finance, entrepreneurship, tech, and the economy for Forbes. Her work has appeared in TheGrio, Black Enterprise, and USA Today.Jennifer is also the author of "Thrive! ... Affordably: Your Month-to-Month Guide to Living Your Best Life Without Breaking the Bank." The book offers advice, tips, and financial management lessons geared toward helping the reader highlight strengths, identify missteps, and take control of their finances.Jennifer’s most important financial advice to her friends is to always have an emergency fund.ExpertiseJennifer’s expertise includes:
- Credit scores
- Credit history
- Credit reports
- Budgeting
- Saving
- Housing
- Retirement
- The economy
- Financial trends
EducationJennifer earned an MBA from The Johns Hopkins University Carey School of Business and completed the Wharton Seminar for Business Journalists.Jennifer is based in New York City.
Freelance Writer
Ron Lyons, Jr is a freelance journalist who has written for Insider's Personal Finance team. Previously he worked on the Insider's Tech desk creating how-to tutorials.
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