PHXHOMELOAN.COMHow to Use
Rent Reporting
to Build Credit
PHXHOMELOAN.COMHaving a poor or non-existent credit
history can make getting a home loan
more challenging.
You don’t need a perfect credit score
to get a loan approval, but you do need
to show financial responsibility.
PHXHOMELOAN.COMAs a renter, you might have been making
regular payments for years.
These unfortunately won’t usually show
up on your credit report unless you make
it happen.
PHXHOMELOAN.COMRent reporting is a service that either you
or your landlord have to set up on your own.
Once you do, the major credit bureaus will
begin to include them in your official reports.
PHXHOMELOAN.COMUnderstand How Credit Bureaus
Use Rent Reports
PHXHOMELOAN.COMThe three major credit bureaus
responsible for compiling your
financial information.
Experian
Equifax
Transunion
PHXHOMELOAN.COMThey include your credit score
which comes from either FICO
or VantageScore.
Whether or not reported rent payments
show up in your score depends upon
the scoring company.
PHXHOMELOAN.COMCurrently, FICO uses several
versions of their model.
This can impact how your score
shows up.
Lenders who use older versions
might not see the rent payments
reflected in your score.
PHXHOMELOAN.COMFICO 9 and FICO 10 are updated
versions that do show reported payments.
Knowing which version is being
used to check your score can help
you see how much influence the
rent payments have on your standing.
PHXHOMELOAN.COMFind Out If Your Landlord Offers
Rent Reporting
PHXHOMELOAN.COMSome property managers currently
offer rent reporting.
They do so to help tenants stay
motivated for making regular
payments that build credit.
PHXHOMELOAN.COMThis amenity is usually free for tenants
but you will want to make sure to pay
your rent on time every month.
You also can ask your landlord to sign
up for a service if it is not included
as part of your rental package.
PHXHOMELOAN.COMCheck Into Independent
Reporting Services
PHXHOMELOAN.COMNow that some credit bureaus
are acknowledging rent payments,
you’ll find companies that offer
reporting services.
Many companies offer as much as
6 months to 2 years of past rental
history reporting.
PHXHOMELOAN.COMIndependent reporting services
do charge fees.
These usually involve having to pay
a larger enrollment fee or initial cost
to get started.
Then, you might need to pay a smaller
monthly fee to continue the service.
PHXHOMELOAN.COMKnow What to Look for In
a Rent Reporting Company
PHXHOMELOAN.COMOne of the biggest things to check
for in a rent reporting company
is which credit bureaus they report
to each month.
Ideally, a service should report to all
three, but it might still be worth it if they
report to the one you are concerned
about the most.
PHXHOMELOAN.COMYou’ll also want to find out how far
back they go to show your previous
rental history and how soon you’ll see
changes on your report.
PHXHOMELOAN.COMExplore Alternative Ways to Build Credit
PHXHOMELOAN.COMOne of the few downsides of rent reporting
is that it can be difficult to know whether
or not it will show up in your credit score.
This is why many people find it best
to use multiple methods to boost their
credit history.
PHXHOMELOAN.COMYou could choose to get a secured credit
card or be listed as an authorized user
on someone else's who has a good
credit history.
Using multiple strategies can help you
see results faster.
PHXHOMELOAN.COMTrying to get a loan when you lack
a lengthy credit history is an age old
challenge faced by many home buyers.
Using your rental history as a method
to improve your credit score is an
effective way to demonstrate more
financial responsibility.
PHXHOMELOAN.COMJust remember to make sure that you
explore all of your options for building
credit and keep making smart decisions.
All of your hard work will pay off when
you get that much needed approval.
PHXHOMELOAN.COMJimmy Vercellino is one of the nation’s top
VA Home Loan mortgage originators.
A Marine veteran, he and his team work hard
to help veterans take advantage of their VA loan
benefit and become homeowners.
PHXHOMELOAN.COMPhoenix Mortgage Lenders
Jimmy V NMLS# 184169
480-800-8387
jimmy.vercellino@goldwaterbank.com
phxhomeloan.com
PHXHOMELOAN.COM