When most people think about the many financial factors that go into calculating your credit score, there are a few specific things that come to mind. But while credit card payments, your mortgage, or any loans might be big factors, they aren’t the only ones. If you’ve ever missed a payment on your credit cards or loans, this is good news.
If you’ve ever fallen short on cash in the past, you know how difficult it can be to decide which bills to pay on time and which will have to wait. Rent, utilities, and food are often priorities, while credit card payments might be pushed to the side in the face of your immediate needs. That could mean that while you have an impeccable record of paying your rent, your credit card payment history could be a bit more spotty.
What if you could add other expenses to your credit report? Is it possible to add rent to credit reports? Keep reading to find out!
Reporting Rent for Credit: Does It Happen Automatically?
While we’ll get into what you need to know to add rent to credit reports soon, it’s important to understand that this is never something that occurs automatically.
In most cases, tenants pay their rent each month by check or directly through their bank account. Because credit bureaus don’t look at your checking account balance or payments processed there, your rent won’t directly affect your credit score.
Can You Pay Rent With a Credit Card?
In most cases, landlords won’t allow you to pay your rent via a credit card. If your landlord does allow this, it will likely come with a processing fee that will increase what you’re paying. However, if your landlord does allow this and you can use credit card points or cash back bonuses to offset the cost of processing fees, you’ll also get the added benefit of an improvement in your credit score — assuming that you are also paying off your credit card bill each month after putting rent on your card.
If you let that debt accumulate, it will have the opposite effect of improving your credit score. Instead, as the amount of credit that you’re using increases and your available credit decreases, your credit score may take a hit.
Paying your rent using a credit card is not the best way to ensure that your payments have a positive effect on your credit score.
How to Add Rent to Credit Reports
The ability to add your rent to your credit report can be a big boost to your score. The average cost of rent in the U.S. for a one-bedroom apartment is $1,098 a month. Depending on where you live, the size of your apartment, and whether it features any luxury amenities, your rent could be several times that.
And, hopefully, that’s a payment that you make each month in full and on time. If that monthly payment isn’t being reported to the credit bureaus each month, you’re missing out.
Luckily, it is possible to report rent to credit bureaus. However, there’s a catch; you can’t do this yourself. Instead, you’ll need to get help from a company that offers rent reporting services.
Here’s what you need to know about hiring the best rent reporting companies to start taking advantage of your rent payments to boost your credit score.
Which Credit Bureaus Will Include Rent Payments on Reports?
Before you take moves to report rent to credit bureaus, you want to make sure that it’s getting reported to the right credit bureaus. The good news is that all three of the major credit bureaus do allow for rent payments to be included in their credit score calculations, as long as you take measures to make sure that it’s reported to them.
This includes Equifax, Experian, and TransUnion.These are the largest credit bureaus and are the ones most often used by loan and mortgage providers and other entities when checking credit scores.
How to Choose Rent Reporting Services
Once you’ve learned which credit bureaus your payment could be reported to, it’s time to get some help. You’re going to need rent reporting services to take your on-time payments and report them to the major credit bureaus.
There are a variety of services available that provide rent reporting, but not all are created equal. Some do not allow for reporting previous rent payments. Others charge very high fees for their services.
Our partnership with Can Rent Build Credit allows our clients to take advantage of rent reporting services without any additional fees. When you sign up for our CIG Platinum Services, you can also take advantage of rent reporting. Our partners will utilize rent reporting for credit building by taking your positive credit account and up to two years of credit history and report them to the major credit bureaus.
Can Rent Build Credit?
Over one-third of all Americans today rent their homes. That’s the highest number of renters since at least 1965.
Despite this high number, many renters don’t realize that reporting rent for credit is a possibility. Many renters realize that buying a home can have long-term benefits, but reporting rent to credit bureaus can help you to put your rent payments you’re already making to work for you.
But is it effective? Will your score see a boost if you add rental history to your credit report? For most renters, the answer is yes.
In 2017, credit bureau TransUnion performed a study of 12,000 renters who began reporting their rent payments. On average, these renters saw a 16 point boost within just 6 months. Those with the lowest credit scores saw the biggest bump to their scores.
Reporting Rent for Credit
You’re already making rent payments each month, on time and in full. So why not make the most of your money? To do this, you need to begin reporting rent to credit bureaus.
With a little help from Can Rent Build Credit, we can help you begin boosting your score using the payments that you’re already making or have already made for up to the last two years. Don’t wait to start taking advantage of this credit-boosting tool! Check out our CIG Membership options today!