Research shows that most of the people who have poor credit are most often renters. They are usually unaware that some credit bureaus accept rent as a sign of creditworthiness. This is a significant issue because people with a mortgage have a distinct advantage and can use their history of repayment to enhance their credit score.
Even with timely and appropriate rent payment, you will often be denied credit or positive signs of payment history. The following are things that you must understand about including your rent on your credit report.
Rent trade-lines were not always allowed on your credit score. In 2011, Experian announced that they would include rent. Recently, TransUnion also announced that they would also be containing rent data.
Only a third party, namely your landlord, can report rental history.
This is not something that you can do yourself. Therefore, one of the things that you should consider when deciding to rent a property is whether they report to the credit bureaus.
Know that if you don’t pay on time, that lousy history will also be reported as well.
Choose from among the many available reporting services. All of them generally work the same. The only significant difference is the cost. All you do is submit and verify or payments to the reporting service, and then they send the information to the credit bureaus. Recognize that rent reporting does not affect your FICO score. While creditors will see rent, trade-lines on your account, it currently does not affect the leading credit score, which is known as the FICO score. It does, however, affect your vantage score, which is another type of credit score that your creditors will often take into account.
Many companies report to the bureaus, but these are the ones that have established significant credibility:
- Rent Reporters
- Rental Karma
- Rent Track
- Clear Now
- Pay Your Rent
- E-Rent Payment
Visit the websites for each of these services to register or to learn more. Make sure that you pay attention to the cost of their services.
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