Credit bureaus don’t automatically collect information about rent payments but will include this data on your credit reports if they receive it. While building credit by paying rent can take some effort, it is simple to do with rent reporting services and a little help from your landlord. Here’s how to get credit for all of those rent payments.
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Does Paying Rent Build Credit?
“Paying rent can build credit if your payments are reported,” says Rod Griffin, senior director of consumer education and advocacy for the credit bureau Experian. “Unfortunately, that’s not the norm as most landlord and rent management companies don’t report rent payments.”
Unless you or your landlord have signed up for a rent reporting service, the three major credit bureaus — Equifax, Experian and TransUnion — will not put rent payments on your credit report. That means your credit score and credit report aren’t affected by your rent payments.
But, Griffin says, you can change that. You’ll need help from a rent reporting service to tell the credit bureaus about your payments.
If you have a positive rental history, adding your rent payments could improve your credit. Griffin says it helps to establish credit or build credit history.
One caveat is that “not all credit scores include rental tradeline information in their calculations,” cautions Freddie Huynh, vice president of data optimization for debt relief company Freedom Financial Network.
Rent payments can be factored into your VantageScore and recent FICO scoring models, such as FICO 9 and 10.
These are not commonly used scoring models. But adding rental history to your credit report could help if you’re seeking credit from a financial institution that relies on one of them.
How to Report Your Rent to Credit Bureaus
Consumers can’t directly report rent payments to credit bureaus. Even if you can show evidence of rent payments, the bureaus won’t accept it .
The credit bureaus get your payment information from public records and creditors, such as banks, card issuers and debt collectors. You will need to work with a rent reporting service to inform the credit bureaus of your rent payments.
“A rent reporting service is a third party that reports your rental payment history to the credit bureaus,” Huynh says.
Rent reporting services must comply with the Fair Credit Reporting Act, a federal law that protects information collected by the credit bureaus and allows you to dispute incorrect information.
Most but not all rent reporting services charge a fee. They work in two ways:
Sign up for a rent reporting service independently. Note that the reporting service may still require your landlord to verify your lease or rent payments. You will pay any fee directly to the service. Enrollment fees vary and could be one time or monthly, plus a setup charge.
Ask your landlord to sign up for a rent reporting service. The reporting service may offer an incentive to the landlord to sign up, such as automatic payment collection from tenants. You won’t pay the service directly, but your landlord may incur a cost and pass it on to you.
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What Services Can Report Your Payments?
Many rent reporting services are available today, so it pays to compare the options and find the best one for you. Here is a selection available to you or your landlord:
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How to Choose a Rent Reporting Service
Before you choose a service, check whether your landlord is already working with one. “If so, there may be an easier path to having your rental history reported,” Huynh says.
If not, consider these questions to select the right rental reporting service:
What does the service cost? Free rent reporting services are rare. Compare the cost and the value of features for each service.
What do you get? Will the service provide you with a record of payments and credit reporting? Also, look at whether the service is seamless and easy to use, Griffin says.
Is the service hard for your landlord to use? Many rent reporting services require your landlord to verify your rental agreement and payments. If your landlord isn’t willing to help, you will need a service that uses your bank account to verify your payments. In California, landlords of assisted housing developments must offer tenants the option to report rent payments to at least one credit bureau for a maximum fee of $10 per month.
Which credit bureaus will receive your information? Ideally, a rent reporting service should report to all three credit bureaus. “Some reporting services report to all three bureaus, while others may only report to one or two,” Huynh says.
How soon will your rent payments appear on your credit report? Credit report changes typically don’t happen overnight. Contact the service and ask when your payment history will appear on your credit report if speed is important for a major purchase.
Can you easily cancel the service? Most rent reporting services use a subscription model and charge monthly or yearly fees. Find out how to cancel and what happens if you do: Is your rental history removed from your credit report if you are no longer paying for the service?
Can you add a spouse or roommate? Some services allow you to include someone else who lives with you at no charge. That means your spouse wouldn’t have to pay separately for rent reporting.
Are past payments reported? Some services include up to two years of rental history with your basic fee, while others charge an additional fee to go back.
What’s the service’s reputation? Look for established services with good reviews, Griffin says. Check for complaints and major issues — try the Better Business Bureau and Trustpilot — signaling that you should use a different service.
Whichever rent reporting service you use, it is a great tool that too few people use to establish and build credit, Griffin says. “As a consumer, you should take advantage of all the tools that are available to empower you and be in control of your credit history,” he says.
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