Power in Renting: Build Credit by Reporting your Rent

For potential homeowners, your rent is the most similar (and likely the largest) monthly obligation.  So here’s a question: Shouldn’t you get credit – pun fully intended – for making those on-time payments?

Even if you’re not actively house hunting, your credit score plays a huge role in your financial life. A strong score can improve your chances of getting approved for loans and credit cards, lower your interest rates, and even reduce your insurance premiums. In switching home internet providers recently, they pulled a credit report to determine our deposit for devices!

Here’s how to make your rent payments work for you:

1. Talk with your landlord.  The bad news is that reporting is optional, and there can be a financial cost to the landlord.  That said, it’s possible they already have an arrangement to be able to report your payments.  Plus, make your case: Rent reporting can attract responsible tenants and encourage on-time payments – benefits for both you and your landlord.
2. Check out third-party services.  Even without landlord reporting, you can still build credit with third-party tools.  Many not only report your rent but also utility, phone, or internet bills to the credit bureaus. Some popular options include: Esusu, Self, Boost (Experian only), Boom, and Credit Rent Boost (Equifax & TransUnion only).

Pro tips before you sign up:

• Compare fees, which credit bureau(s) they report to, and whether it requires landlord approval. 
• Check whether the provider can also pull historical data to boost your score more quickly.
• Be cautious of upsells such as “credit-building loans.”  Say no to any services that cost more than they benefit or aren’t what your today credit needs.
• Keep in mind: While all three credit bureaus accept rent information, not all credit scoring models use that data to generate your score.  Meaning just because it’s on your report doesn’t necessarily mean it boosts your score.  If you’re denied credit for a major purchase, you can request to have a manual review to take into consideration the other data on your report.

Your rent payments are already part of your monthly financial routine – why not let them work for you? Whatever your financial goals, building your credit with rent reporting is a smart, proactive step.  Start by talking with your landlord or exploring a rent-reporting service this week. Your future self will thank you.