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 services will report your rent payments to lenders?
There are several ways to get records of your payments in front of lenders. Among them:
- 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 $5 per month reported. 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 $6.95 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.
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.
Which credit scores consider rent payments?
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 — Experian, Equifax and TransUnion — do include rent payment information in credit reports if they receive it.
Although rent is reported as a “tradeline” on credit reports — much like a mortgage or car loan would be — it’s not treated the same for credit scoring purposes, says consumer credit expert Barry Paperno, who blogs at Speaking of Credit.
The most commonly used versions of the FICO score don’t use rental payment information in calculating scores.
What questions should you ask a rent-reporting service?
Here are questions you should ask rent-reporting service providers. Also, check to see if your property manager already works with a service.
- 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. Critics have expressed concern that tenants might be afraid to exercise their rights for fear of being reported late to the credit bureaus.
How does rent reporting compare with other types of credit building?
Other credit-building strategies rely on more traditional tradelines. You can get a secured credit card, for example, or a credit-builder loan. Revolving debt, such as credit cards, and installment loans are considered in virtually every credit score.
If you want the best rates and terms, you have to build credit the old-fashioned way — with credit accounts.
Rent information may help lenders that are prospecting for people who may be creditworthy and have been overlooked, experts say. But most lenders are still focused on attracting people with good traditional credit scores. If you want the best rates and terms, you have to build credit the old-fashioned way — with credit accounts.
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. A study by the nonprofit Credit Builders Alliance showed that rent reporting led to more on-time rent payments and higher Vantage 3.0 credit scores for participants.