Does Rent Affect Credit Score?

Does Rent Affect Your Credit Score

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When you fill out a rental application for a new apartment or home, the landlord often runs a credit check. So you might expect that your rental payments are shown on your credit report, but they are not. 

When you are building credit, there are rent payment reporting options out there that can add your rental payments to your credit reports. This has the potential to impact your credit score.

Do Your Rent Payments Affect Your Credit Score? 

No. Normally rent does not affect your credit score. However, there are services that you can use that will report your rent payments to the credit bureaus. When it is reported, it will impact the payment history, length of credit history, and other portions of your credit scores. If you’d like to see some statistics, check out our article on Credit Score Statistics for more information.

If you have a positive payment history, your credit score will go up. If you have late rent payments, your credit score will go down. 

Generally speaking, rent does not affect your FICO score because most landlords do not report it to the credit bureaus. Either because they are too small to meet the credit bureaus reporting requirements or because they don’t want to pay the fee that comes with reporting. 

But there are larger landlords that do give their tenants the option to pay a small fee for rent reporting. Or, you can independently sign up for a rent reporting service yourself. Some of which don’t even require verification from your landlord. 

When this positive rent payment history is added to your credit reports, it can improve your credit score. Much like a credit card or loan, rent payments will help you build your length of credit history and establish a perfect payment history. 

Is Rent Reported to Credit Bureaus?

Rent is usually not reported to the credit bureaus. 

Most of the major credit bureaus (TransUnion, Experian, & Equifax) have very specific requirements for landlords who wish to report payments and/or debt. 

Transunion, for example, requires a landlord to have 100 accounts (i.e. tenants) before they are allowed to register for credit reporting. 

So, it is possible that your landlord doesn’t even have access to credit reporting services. 

If your landlord is larger, or your property manager uses a rent payment service that offers rent reporting, then your rent payments could appear on your credit report. 

The service is not usually free, so you may be required to pay a fee to receive rent reporting.

If you do have your rent reported, the credit bureaus will receive information on the history of your rent payments, the amount of rent you pay, and how long you’ve been renting at the property. (Credit Rent Boost Review or Rental Kharma Review)

Rent history can also appear on your credit report when you are sent to collections or evicted. 

What Information Is Included in a Credit Report?

Your credit report is full of information on your identity, credit accounts, and more. 

Each person’s credit report contains some basic information about that person. Name, birthdate, social security number, current address, current employer, etc. This information does not affect your credit, it is used simply for verifying your identity. 

The most important facet of your credit report is all of the information available regarding your credit history. This information can include: 

  • Credit cards: current balance, credit limit, and opening date
  • Loans: current balance, original loan value, and opening date
  • Service payments: Rent, utilities, and other bills can be reported to the credit bureaus if you know how. We share how to do this elsewhere on the blog!
  • Closed accounts: 7 years or younger
  • Payment history: on all accounts that are on time and late
  • Credit inquiries: hard pulls and soft pulls
  • Collections: hospital bills, overdue utility bills, unpaid debt, etc.
  • Public record: bankruptcies, evictions, etc.

This information is what is used to establish if you are creditworthy and to calculate your credit score. Note: Your actual credit score is not part of your credit report, it is a separate feature. 

It is possible that not all of your accounts or inquiries appear on a single credit report. You have three credit reports, one from each of the major credit bureaus (Experian, TransUnion, & Equifax), and certain information may have only been reported to one or two. 

This is why many lenders/creditors pull all three reports, that way they have access to the full picture of your creditworthiness. 

If your rent is being reported to the credit bureaus then information on when your lease started, how much your rent is, and what your payment history looks like will all be added to your credit report. If you’re having trouble finding a place to rent, check out our How to Rent With Bad Credit article.

How to Find Out if Your Rent is Being Reported

The easiest way to find out if your rent is being reported is to check your credit reports yourself. 

You can pull a free credit report once a year from Equifax, Experian, and TransUnion. 

There are also 3rd party services, some of which are free, that allow you to view information that is being reported. Your credit card or loan account may even come with some kind of free credit report update feature. 

If you don’t have access to a free credit report, there are 3rd party options for credit monitoring or you can pay and pull your reports directly from the credit bureaus. 

When looking at your report, your rent payments should appear in the “Accounts” section as a “Residence tradeline”. The exact name of the entry will depend on which service you are using to report your rent payments. 

If your rent is supposed to be reported, and you don’t see it on your credit report, then you’ll need to contact whoever is in charge of the reporting. See also our RentReporters Review if you’d like to see our take on a company that does this for you.

Rent Reporting Can Go Either Way

If you have a thin credit file, then rent reporting can go a long way towards improving your low credit score. But only if you have a good rental history. 

If you’ve been renting for 2 years, you pay your rent on time every month, and your current credit scores are low, then having your rent reported to the credit bureaus should improve your credit by a lot

But, if you fall behind on your rent payments or you have in the past, then adding your rental history to your credit reports can actually damage your credit. 

Keep in mind that only 30-day late payments are considered late according to the credit bureaus. So if you paid your rent a few days or weeks late, then credit reporting will still help you credit scores.

It is also important to consider that not all FICO scoring models consider rent payments into score calculations, so when you are applying for new credit, your rental payment history may not even be factored in. 

However the older, more established scores, like FICO 8, do take it into consideration.

Also, when using a 3rd party rental reporting service, if you cancel your subscription, your rent account may appear as closed which could temporarily decrease your credit score. 

And, if you already have a well-established credit history and good credit score, then you might want to skip rent reporting altogether as the rental account could decrease your length of credit history and drop your credit score. This only applies to people with credit scores of 700+.

How Much Can Rent Raise Your Credit Score?

Having your rent reported has the potential to dramatically increase your credit score. But exactly how much your credit score will increase depends on what your current credit profile looks like. 

Most 3rd party rent reporting companies promise average credit score increases around 40 points. But this is usually based on a customer with a thin profile who has 2 years of rent payment history added to their report(s). 

If you have a thin profile and your rental history is 1-2 years, you could see a credit score increase well over the 40 point mark

Plus, each month you continue to have your timely payments reported, your credit score may rise by a few points. 

If you have a bad credit score because of negative remarks on your credit report, i.e. bankruptcy or late payments, then your credit score may not increase as much or as fast. 

The individuals who will see the biggest increase to their credit scores, 100+ points, are those who previously had very low credit. Having your rent history and ongoing rent payments reported can raise your score to the mid 600s or higher in just a few months. 

What Can You Do if Your Landlord Doesn’t Report Rent?

If your landlord doesn’t currently report your rent to the credit bureaus, you still have a few options for getting your rent payments reported. 

Start by talking to your landlord. You can refer them to rent reporting services to see if they are interested. You can also ask if they are open to letting you use a 3rd party service, many of which require cooperation and verification from your landlord. 

You can also check with the company that processes your rent payments (if your landlord uses one). Many rent payment processing companies now offer reporting services to renters. You’ll simply need to opt-in and pay a small fee. 

If neither the company processing your payment nor the landlord is willing to help you, there are several 3rd party companies out there that work directly with tenants to get their rental data reported. 

One of the best services on the market right now is BoomPay. This service allows you to pay your rent and build your credit all in one place.  

Try BoomPay

Through BoomPay’s BoomReport product, your payment information gets reported to all three credit bureaus each month. BoomReport is the only rent reporting service on the market that reports rent payments to all three credit bureaus. Also check out our BoomPay Review for more information.

You can even add up to 2 years’ worth of past payment history for a one-time $25 fee. BoomPay customers report a credit score increase of anywhere from 10 to 100 points within a few weeks of starting. It’s that good!

So, if you are ready to begin improving your credit with rent reporting, check out BoomReport.

You can read our more in depth review of the best rent reporting companies here.

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