HOW TO MAKE RENT WORK FOR YOU
You cannot fully control how much money
you make. But your credit score — the key to
qualifying for rewards credit cards, financing
a car or even a home — is largely under your
control. Rent payments can be used to beef up
your score.
For many millennials, rent payments are a great
way to demonstrate responsible behavior to
potential creditors. But rent payments — unlike
credit card, mortgage and loan payments —
don’t automatically appear on credit reports.
And your credit scores rely on what’s in your
credit reports.
There are two ways to get rent added to
your reports:
— ASK YOUR LANDLORD. Two of the three major
credit bureaus — Experian and TransUnion —
accept payment information from landlords.
Both bureaus’ websites have a simple process for
landlords to sign up.
— DO IT YOURSELF. You can use third-party
companies such as RentTrack, Rock The Score
and others to report rent payments directly to
one or more bureaus for a monthly fee.
A 2017 TransUnion study followed 12,000
renters for a year. Scores rose 16 points on
average within six months after rent reporting
began, says Maitri Johnson, vice president of
multifamily at TransUnion. The largest increase
was for scores below 620, generally considered
bad credit.
With rent reporting, payments show up on your
credit report like any other account. Positive
payments help your score; missed or late
payments can damage it. If there are errors, you
can dispute them with the bureaus.