WHAT TO KNOW
Rent reporting lets you get credit for something
you’re already doing. Better credit can get
you a cash-back credit card or a cheaper car
loan, saving you money in the short term and
strengthening your finances for the long term.
But rent reporting also has some drawbacks:
— NOT ALL CREDIT SCORES FACTOR IN
RENT PAYMENTS. FICO 8, the most widely
used score by lenders, and the FICO versions
used in mortgage lending do not use rental
information to calculate scores. But newer
versions, such as FICO 9 and FICO XD, do.
VantageScore, FICO’s main competitor, also
uses rental payment information.
“Even if it’s not something considered in your
score, it’s still cosmetically on your credit report,”
says John Ulzheimer, a credit expert who has
worked at Equifax and FICO. “A lender considers
information in good standing and that’s going
to benefit you as an applicant.”
— REPORTING IS NOT FREE. If you use a reporting
service, you’ll pay a monthly fee ranging from
$6.95 to $9.95 depending on the company, plus a
one-time enrollment fee of $25 to $95. Extras like
adding past rental information cost more.
OTHER WAYS TO BUILD CREDIT
Ulzheimer points out that traditional credit-
building methods are more effective than rent
reporting: They don’t cost much, payments are
typically reported to all three credit bureaus,
and they influence all types of FICO scores
and VantageScores.
— You can become an authorized user on
someone else’s credit card, preferably someone
with a long history of responsible credit use.