COULD RENT REPORTING
BOOST YOUR
Building a strong credit history
is hard when you don’t have years
of experience with paying down debt.
You might also be hesitant to open up
new lines of credit when you are
applying for a mortgage loan.
If you look at your financial track record,
one thing you might notice is that you’ve
been paying rent for years.
Getting the rent reported to the major
credit bureaus is one way to demonstrate
financial responsibility.
Rent payments are not typically reported
to the credit bureaus automatically.
This means that you will need to take a few
steps to make it happen.
You might be able to get rent reported
for free in some cases, but you will
typically need to pay a fee.
You could also have better options
to build your credit, but it is worth
looking into this option.
Will Rent Payments
Show Up On My
Credit Report?
There are three major credit
reporting bureaus:
Experian
Equifax
Transunion
They each compile data about your
financial standing to put into reports
that are accessible to lenders.
There are also two major credit scoring
companies called VantageScore and FICO.
FICO uses several versions
to calculate credit scores.
Right now, the more commonly
used ones do not always include
rent payments.
Newer versions that are increasing
in use do count rent payments that
get reported.
VantageScore will include reported
rent payments in their scoring system.
How Do You Set Up
Rent Reporting
On Your Own?
There are several rent reporting services
that you can set up independently.
Keep in mind that some of these require
your landlord to verify that you make
your rent payments on time.
These services can also range in price.
Some require an initial enrollment fee
followed by a monthly reporting cost.
They can also vary according to how far
back they go when reporting payments.
When you select a reporting service,
make sure to check that they report
to your preferred credit bureau.
What If My Landlord
Will Help?
Some landlords and property
management companies offer rent
reporting as an amenity to renters.
They know that reporting rent serves
as an incentive to get people to pay
on time.
This service can also attract
financially-savvy tenants who
want their payments to count.
ClearNow is one service that
you might see.
This one requires you to accept having
your rent payments be automatically
deducted from your checking
or savings account.
It comes with the benefit of being free
for tenants if your landlord signs up.
There are also other services for
landlords and it is best to ask yours
if they offer this option.
What Are
Other Strategies
to Build Credit?
Rent reporting services tend to come
with the slight disadvantage of only
reporting to one or two credit bureaus.
Other methods of building credit tend
to be more likely to get recognized by all
of the credit reporting companies.
For example, you could get listed
as an authorized user on a trusted
family member’s credit card.
Taking out a small loan can also help
you to build yourcredit through showing
regular payments.
When you think about how long you
pay rent, it only makes sense to find
ways to use it to your advantage.
With the right service, you could boost
your credit score enough to help get
a better interest rate on a home loan.
Jimmy 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.
VA LOANS FOR VETS
NMLS#184169
5050 North 40th Street, Ste 260
Phoenix, AZ 85018
602-908-5849
jimmy@valoansforvets.com
valoansforvets.com