It surprises people to learn that rent payment information isn’t reported to the major credit bureaus and that they have to take steps to make sure rent payments are listed on the credit reports. Luckily, there are several ways to make sure you’re credited for on-time rental payments. After all, most tenants spend around 30% of their income on rent, so it should go on your credit report and benefit your credit history, and payment history, and improve the loan approvals in the future.
Let’s go over how you can get your rent payments to the credit bureaus.
Do Rent Payments Help Build Credit?
In a way, it absolutely does. Paying your rent on time doesn’t automatically get reported, but making sure to report rent payments to credit bureaus can help someone with little credit history build up a credit report and payment history. Both of these things are important to have a good credit score, as a lack of history can get you a poor one, and increase your chances of landlords renting to you in the future.
It’s important to note that having your rent on your credit reports isn’t the best solution for poor credit, it’s better for building credit and payment history. To repair your credit, there are better solutions and strategies, which you can read in-depth here: Your Financial Health | n2cred
How Does Rent Reporting Benefit?
Beyond rent payments helping to build a payment history and improve your credit, there are benefits for both the tenant and landlord by making sure paid rent is shown on credit reports.
Benefits for the Renter
The primary benefit for the renter is by showing on-time rental payments, they become a more attractive candidate for future landlords and can build up their credit scores over time. If a potential employer looks at your credit history, your on-time payments can help you pass employment background checks more easily.
Benefits for the Landlord or Management Company
Having your renters’ payments reported to the credit bureaus helps build a better relationship with your tenants while also ensuring you attract financially responsible tenants, encouraging them to pay on time instead of relying on eviction laws.
How to Report Rent Payments to Credit Bureaus
There are three major credit bureaus: Experian, TransUnion, and Equifax. Each of them allows landlords to report rental payments directly to them every month, but only for high volume landlords. For example, TransUnion requires the landlord to have at least 100 accounts to report the information.
It’s important to check whether or not your landlord or the property management company already reports rent payments, but if you need to find one yourself then here are some questions you should ask before signing on for those services:
- What is the total annual cost of the service and are there any setup fees or fees to report previous rental history
- Which of the major credit bureaus do they report to, best if it’s all three.
- Is there access to a free credit score?
- How can the service be canceled
- What happens if there is a dispute with the landlord and the lease is broken?
- How is your personal data and information protected?
If your landlord doesn’t report rent payments to a reporting services platform, you have several renter reporting options to choose from, including n2cred which offers much more than rental reporting. Be sure to check them out and look at their solutions to a poor credit score and a way to report rent to the big three bureaus.
Learn Credit Management
Make every dollar you spend on rent count. Reporting your rent history is an opportunity no renter can afford to miss and a great way to have healthy financial history attached to your name.
Having your rent history and on-time payments reported is a good element to have in a financial and credit strategy, as are other types of credit management which N2Cred gives information on.