You can get credit for the rent you pay if you have the right landlord or use the right rent-reporting service. Start by asking your landlord or property management agency if they report on-time rent payments to the credit bureaus – and if so, how often. If they don’t, you might be able to convince them to start. The information in your credit reports is based solely on what creditors submit to the bureaus. And your credit scores are based on your credit reports.
Some property owners may not report your on-time payments every month. They may, however, alert the credit bureaus if you’re late in paying or evicted for non-payment. So you need to make sure you’re getting credit for the good stuff.
Another option is to enroll in a rent-reporting service. Companies such as RentTrack, Rent Payment and RentBureau work with your landlord and specialize in reporting rent payments to the major credit bureaus. Prices range from free to up to $100 per year. Before you sign up, determine whether you’ll make future rent payments to the reporting service or directly to your landlord.
No. Paying rent does not build credit ordinarily, but it is possible to build credit by arranging to have rent payments reported to the credit bureaus each month. Your credit score is calculated based on the contents of your credit reports, and rent payments normally are not reported to Experian, Equifax and TransUnion – the three major credit bureaus that produce credit reports. As a result, there are only two scenarios in which rent payments could affect your credit score, and only one of them is positive.… read full answer
First, paying rent can build your credit score if you use a service that will report your rental payments to the credit bureaus. There are many ways you can report rent payments, so you should select the option that makes the most sense for you. If you consistently pay your rent on time, you can benefit from this addition to your credit report.
Second, renting could negatively affect your credit score if you fall behind on your monthly payments to your landlord. If your landlord turns your outstanding payments over to a collection agency, you will likely experience a drop in credit score when the collection account is added to your credit reports. You can find out exactly how much your credit score will suffer due to a collection account by using WalletHub’s Credit Score Simulator.
At the end of the day, there are more dependable ways to build credit than by paying rent. If you want to find out the best approach for your particular situation, you can view customized credit-improvement advice through your free WalletHub account.
Paying utility bills on time won’t help your credit score. But failing to do so could hurt it. Most utility companies (e.g. cable, internet, gas, electric) do not report account information to the major credit bureaus on a monthly basis, you see.
So on-time payments won’t add positive information to your credit reports – the key to credit improvement. Rather, utility bills are generally reported to the bureaus only when they’re past-due and/or sent to collections. And having late payments, collections accounts and other such … read full answernegative records on your credit report will damage your credit.
To prevent utility bills from harming your credit score, you clearly need to pay them on time. And WalletHub’s on-time payment tips will give you a good sense of how to accomplish that. In particular, setting up automatic monthly payments from a deposit account will at least prevent forgetfulness from hurting your credit. Some good-old-fashioned budgeting will help, too.
Finally, it’s worth noting that certain specialized credit scores do incorporate utilities payments. But those scoring models are the exception, not the rule. And they aren’t used for most lending decisions.
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