The information shown on your credit report is used to determine your creditworthiness. It includes data about the money you have borrowed through loans or credit cards. When you’re just getting started trying to build a credit history, you may wonder, “Does paying my rent help my credit?”
Building a Credit History From Scratch
If you’ve never had any kind of borrowed money, you may not be able to prove to potential creditors that you’re not a risky borrower. If you’ve always paid your rent on time, it would seem like that should show up on your credit report. If it did, it would be one way to demonstrate that you pay bills when they’re due, but rent payments don’t typically show up on a credit report.
Can You Get Rent Payments Added to Your Credit Report?
Not many landlords automatically report rent payments to the credit bureau. It’s possible to have them added to your credit report if you use a rent reporting service. Some of these services are free while others may cost $100 a year or more.
Examples of rent reporting services include Pinata and Level Credit. Pinata is a free service. By connecting your bank account to Pinata’s secure platform, when you pay rent each month, the app verifies the payment and reports the information directly to one of the three main credit bureaus. LevelCredit charges a low monthly fee to subscribe to their service. Your rent payments are reported to the credit bureau, and you have access to a dashboard where you can see your credit score and get tips on building credit.
Before signing up for a rent reporting service, find out which of the credit bureaus they report to and how you can cancel the service when you want to.
Rent Payments and Your Credit Score
Not all credit scoring models consider your rental payment history when calculating your credit score. While the Vantage score and the newest version of the FICO score consider rent payment history, some of the more commonly used FICO scores don’t look at that.
Other Ways to Build Credit
If you’re trying to build credit from zero, you may want to consider other ways to build credit besides relying on your rental history. A credit builder loan or a secured credit card are some other ways to get started building a payment history on your credit report. Becoming an authorized user on someone else’s credit card account can also help you to build credit.
Protecting Your Credit
Once you start borrowing and repaying money and building your credit history, it’s important to be proactive about protecting your credit. Always pay your bills on time and avoid borrowing more than 30 percent of the available credit on revolving accounts.
Review your credit reports at least annually to make sure there are not any errors on them. Dovly is an automated credit repair engine that can help you dispute any errors you find on your credit report. Try it risk-free with our free membership tier. Get in touch with Dovly today.