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A lot of people who don’t have much of a credit history do have a history of paying rent on time. But that information doesn't show up on their credit reports, and doesn't help their credit scores.
You can’t report rent payments yourself. But rent-reporting services can get your credit reports to reflect your rent payments fairly easily, at a cost that ranges from free — if your landlord pays it — to more than $100 a year.
To use a rent-reporting service effectively, you’ll need to know which credit bureaus it will report your payments to — and which credit scores take those payments into account.
It's also important to understand that this may not be the most cost-effective way for you to build your credit with all three credit bureaus and to understand your alternatives.
Do rent payments affect credit?
All three major credit bureaus — Equifax, Experian and TransUnion — will include rent payment information in credit reports if they receive it.
Credit reports in turn provide the data that go into your credit scores. The two major credit scoring companies, FICO and VantageScore, vary in how they handle rent payment information:
The most commonly used versions of the FICO score don’t use rental payment information in calculating scores.
Which services will report your rent payments?
There are several ways to get records of your payments in front of lenders. There are two types:
Services you can use independently
Note that your landlord may need to verify your rent payments. Some services may not be able to report your payments if your landlord won’t verify.
Rent Reporters: There is a one-time enrollment fee of $94.95, which includes up to two years of reported rental payments, then the service is $9.95 per month. It reports to TransUnion and Equifax.
Rental Kharma: Initial setup is $50, including six months of past history, and the service is $8.95 per month. It reports to TransUnion.
LevelCredit: Previously known as RentTrack, LevelCredit charges a $6.95 monthly fee to have your rent and utility payments reported to Equifax and TransUnion. A look-back of up to 24 months is available on your current lease for a fee.
Rock the Score: There is an enrollment fee of $25, and ongoing service costs $8.95 per month. There is a $99 fee for reporting up to two years of rental history. It reports to TransUnion and, if the landlord is a property manager, Equifax.
Esusu Rent reports your rental payments to the three major credit bureaus. You can sign up as an independent renter for a $50 annual fee on the Esusu Rent mobile app. (It also has a version offered through landlords.)
CreditMyRent: This service charges a monthly fee of $6.95 and a one-time setup fee between $25 and $145, depending on what tier of service you choose. It reports to TransUnion.
Services you can use if your landlord does
ClearNow: This service debits your rent from your checking or savings account. There’s no cost to tenants, but your landlord must be signed up. If you opt in, payments are reported to Experian via its RentBureau.
PaymentReport: A $49 enrollment fee gets you two years of rental history reported to Equifax and TransUnion. Ongoing reporting is free. It requires that your landlord be signed up.
PayYourRent: Variable fees, depending on how rent is paid; in some cases, the fees are paid by management. It reports to all three credit bureaus.
How to choose a rent-reporting service
First, check to see if your property manager already works with a service. If not, here are questions you should ask rent-reporting service providers before choosing one:
What would my total costs be for a year of service, including any setup fees or fees for reporting previous rental history? (Some services can go back as far as 24 months.)
How do you protect my personal data?
Which of the major credit bureaus do you report to? (All three is ideal.)
Do you provide free access to credit scores, and if so, which score(s)?
How soon should I expect the information to appear on my credit report?
How can I cancel the service?
What happens if I have a dispute with my landlord? In some states, renters have a right to withhold payment if the landlord fails to keep the unit repaired and habitable. Find out whether rent withheld during a dispute is reported as nonpayment or a negative mark.
Does paying rent build credit?
Simply paying your rent will not help you build credit. But reporting your rent payments can help you build credit — especially if you are new to credit or do not have a lot of experience using it.
A 2017 TransUnion study followed 12,000 renters for a year as they reported their rent payments. Scores rose 16 points on average within six months after rent reporting began, according to the study. The largest increase was for scores below 620, which is considered bad credit.
Having rental payment information in your credit report can be useful if you rent again. Landlords prefer tenants who can show a history of paying on time.
But other strategies to build credit are more efficient than rent reporting because they influence all types of credit scores and usually report to all three credit bureaus. They also can cost less or, in the case of authorized usership, nothing.
You can become an authorized user on someone’s else credit card and benefit from their good credit history.
You can get a secured credit card, which requires a deposit and often serves as your credit limit.
You can get a credit-builder loan at many credit unions or community banks. Your loan payments are reported to the bureaus and you get access to the funds only after you have paid it off.