Table of Contents
- Rent reporting involves sharing your on-time rental payment history in order to boost your credit score
- Landlords are not legally obligated to report your rental payment history automatically
- You can enroll for rent reporting directly through your management company pending eligibility or through a reputable rent reporting service for a fee
- Rent reporting will share late or missed payments as well, so it’s important to be particularly precautious once involved with the service
What Is Rent Reporting?
Rent reporting is the voluntary sharing of your rental history to the main credit bureaus of Equifax, TransUnion, and Experian. This data is then incorporated into your credit report, which can impact your credit score.
Renters may opt to report payments to build their credit since showcasing consistent, on-time payments can speak to creditworthiness and improve your credit score. Reporting can also add to the length of your credit history, which is another factor affecting your credit.
Services may be covered by your landlord, or in other cases, conducted in exchange for a monthly fee, usually under $10 per month. Those trying to build their credit history, rebuild their credit score, or seek out better rental properties or terms in the future may be interested in rent reporting.
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How Does Rent Reporting Affect Your Credit Score?
Rent reporting can positively or negatively affect your credit score, based on your payment data. Those who demonstrate consistent, timely payments can expect a boost in their credit score. Reporting rent captures data that can speak to the length of your credit history and general creditworthiness, which can be beneficial for renters seeking to build their credit.
However, it’s important to note that rental reporting will capture missed or late payments as well. Before opting into rent reporting, it’s essential to commit to timely payments to have the best chance of reaping the rewards of the service.
Factors To Consider While Selecting a Rent Reporting Service
Not all rent reporting services are created equal. Here are several factors you should consider before committing to a specific service:
- Credit Bureau Compatibility: Ideally, your rent reporting service reports to TransUnion, Experian, and Equifax. Some rent reporting services only report to one or two.
- Fees: Rental reporting services sometimes come with installment fees and monthly costs that should be factored into your final decision.
- Length of Credit History Reported: Some rental reporting services can report data for up to two years prior to your enrollment. Having additional data access may speak to your creditworthiness.
- Security Track Record: When dealing with sensitive information, it’s vital to work with a reputable organization that has a track record of protecting your data.
- Landlord Considerations: If your landlord or property manager is already enrolled in a service, it may be most convenient to opt for their direct rent reporting partner.
How Much Does Rent Reporting Cost?
Rent reporting can be free if your landlord is already enrolled in a service such as:
- Esusu: Available by opting in through your landlord or the Positive Rent Payment program. Rental payments are reported to all three credit bureaus.
- PayYourRent: Residents opt into service provided by landlords, with rental data reported to all three credit bureaus.
- ClearNow: Rent payments are debited from your checking or savings account and reported to Experian.
Even if your landlord or property manager does not enroll in a service, you can report your rent through a paid service, like the following:
- RealPage: RealPage rent reporting costs $4.99 per month and reports to all major credit bureaus.
- Boom: Boom has an enrollment fee of $10 and a monthly fee of $2 to report history to all major credit bureaus. You can extend your past payment history up to 24 months for an additional $25 fee.
- Rental Kharma: Rental Kharma reports to TransUnion and Equifax, sharing all of your rental history at your current address. There is an initial setup fee of $75 and a recurring monthly fee of $8.95.
In addition to these two broader categories, there are a few select options of free services that do not require your landlord to enroll in a service like Piñata. The service reports to TransUnion in exchange for you verifying your rent payment with bank records on your due date.
Effectiveness of Rent Reporting
Rent reporting can positively impact your score, especially for those with limited credit history. Both payment history and length of credit history factor into your credit score, both of which can be improved through consistent, on-time reported rent payments.
In a study conducted by Experian, 75% of consumers who opted into rent reporting saw an increase of 11 points or more to their credit score. It’s also worth noting that some rent reporting services can report up to two years of past payments, enhancing the credit file.
While rent reporting can be an effective way to boost your credit score, it definitely isn’t the only way to improve your creditworthiness. You can supplement your credit-boosting strategy by focusing on making timely payments across the board, keeping credit utilization low, monitoring your credit report regularly, and minimizing hard inquiries to your credit report.
Final Thoughts
Rent reporting can be a valuable tool for building positive payment and credit history to boost your credit score. The voluntary process can help you improve your creditworthiness, but it’s important to find the right service to reflect your history accurately. Keep in mind that rent reporting is just one of many ways to boost your credit.
Frequently Asked Questions (FAQs)
How Does Rent Reporting Influence Credit Scores Compared To Other Credit Activities?
Payment history accounts for 35% of your credit score, so rent reporting positive financial habits can have a noticeable beneficial impact on your creditworthiness. Rent reporting can also build the length of your credit history to improve your score.
Can Past Rent Payments Be Reported, And How Does This Affect The Credit Score?
Yes! Rent reporting, either through an enrolled property manager or a professional reporting service, can be a feasible way to build credit. On-time payments can help improve your credit score by serving as proof of your creditworthiness, while late or missed payments can have the opposite effect.
Are There Any Potential Downsides To Using Rent Reporting Services?
Rent reporting services will report both on-time and missed payments, so it’s essential to keep a positive payment track record if you are using rent reporting services. These services can also run a regular monthly fee, though it tends to be fairly minimal.
Why Is Rent Not Reported To Credit?
Landlords are not required to report rent payments to Experian, TransUnion, and Equifax. However, rent reporting services might be available to you depending on your situation, which can help you build a positive credit history.
How Long Does A Broken Lease Stay On Your Credit?
If you fail to pay penalties associated with breaking a lease agreement prematurely, your landlord can turn over those penalties to a collection agency. Should this infraction be reported to one of the major credit bureaus, it can remain on your credit report for up to seven years.
Find out more
- What is Credit Repair? – An in-depth look at the credit repair process.
- What is the Lowest Credit Score? – Learn about the implications of having a low credit score.
- Understanding Credit Repair Cost – Get informed about the expenses involved in credit repair.
- Removing Old Names and Addresses from Credit Report – Steps to update and correct your credit report.
- Soft vs Hard Credit Checks: What You Need to Know – Understanding the difference and impact of soft and hard credit inquiries.
- Tips for Comparing Credit Repair Companies – Advice on choosing the best credit repair company for your needs.
- What Affects Credit Score? – Delve into what really affects your credit score.
- What is a Good Credit Score? – A guide to understanding and achieving a strong credit score.
