Many people don't realize that consistently paying rent on time can positively impact your credit score. Reporting your on-time rent payments to credit bureaus demonstrates responsible financial behavior and allows you to build your credit history. If you're looking to give your credit score a boost, here's what to know about reporting your rent to the credit bureaus.
Why you should report your rent
When your rental payment history is included in your credit file, it can do the same helpful things that mortgage or loan payments do. First, it establishes length of credit history, which accounts for 15% of your FICO credit score's calculation.
But to be clear, simply paying your rent will not help you build credit. You need to actually report your rent using the methods below.
Who should report their rent
Any renter who pays on time each month should consider reporting payments. Whether you rent an apartment or house, you deserve recognition for this responsibility; even if you don't have a solid credit history, you probably have a history of paying your rent on time. This is why rent-reporting is valuable for anyone with thinner credit files, as well as those who may need to rebuild credit after issues like bankruptcy.
How to report your rent
Many property management companies and private landlords now facilitate rent reporting. Ask your landlord first if they submit payments to credit bureaus on the renter's behalf. There's a good chance you were automatically enrolled when you signed your lease, at no additional cost.
Otherwise, look into getting your landlord to enroll in a rent-reporting service like Piñata (which is free to use). This way your rent payments will be reported to all three of the credit reporting bureaus: Experian, TransUnion, and Equifax. All three bureaus will take those payments into consideration, as paying your rent on-time and in full speaks positively towards your financial management skills.
There are rent-reporting services that cost money, but I don't recommend those. Whatever boost you get to your credit history likely won't be worth the annual fees from these services, especially when free ones are on the table.
Additional tips to boost your credit score
Reporting your proper rent payment history is an easy, no-cost way to get credit for demonstrating financial responsibility month after month. Along with rent reporting, make sure to avoid late payments, maintain low balances on credit cards, and fix any errors on your credit report to raise your scores higher.
After a certain point, having a super high credit score doesn’t actually matter. What matters is that with a little diligence, you can build strong credit to keep your financial options open, even when times get tough. For more actionable tips on improving your credit score, check out this Lifehacker post.