A lot of people who don’t have much of a credit history do have a history of paying rent on time. If that information showed up on their credit reports, it might 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 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.
Which credit scores consider rent payments?
Overall, rent payments remain rarely reported to credit bureaus. A FICO spokesperson estimated that less than 1% of credit files contain rental entries. But all three major credit bureaus — Equifax, Experian and TransUnion — do include rent payment information in credit reports if they receive it.
Credit scores are based on the information in your credit reports. 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.
- Newer versions of FICO, such as the FICO 9 and FICO XD, do consider rental information.
- VantageScore, FICO’s competitor, does consider rent payment information. (NerdWallet offers a free VantageScore from TransUnion).
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:
- Esusu: A mobile app that also helps you borrow money from peers, Esusu reports rent payments to Equifax.
- Zingo: This service requires you to link your financial accounts to identify rent payments. It works only if you live in housing managed by a property management company. Zingo reports payments to Equifax. The service is free for a limited time, according to Zingo’s website. You can add 12 months of rental history information for a one-time fee of $89.99.
- 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 $25, and the service is $6.95 per month. During enrollment, you can report payments made in the previous 24 months for a fee of $60. It reports to TransUnion.
- RentTrack: Fees can vary depending on whether your landlord is a client. Without landlord participation, RentTrack collects the rent for a $9.95 fee and then sends a check to your landlord. A look-back of up to 24 months is available on your current lease. It reports to all three credit bureaus.
- 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 Equifax.
- 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 RentBureau.
- 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.
- eRentPayment: Tenants may sign up for this rental payment service only if the landlord is registered. There is a $3 per transaction fee for processing electronic rent payments; the landlord may split that cost or require that the tenant pay it. Reports to all three credit bureaus.
- 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.
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.
What questions should you ask 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. Your loan payments are reported to the bureaus and you get access to the funds only after you have paid it off.