When we moved out of our parent's house, we moved into a rental and started paying rent. Most of us never consider how those monthly payments can help us build or improve our credit history. As a renter, you can get credit for paying your monthly rent consistently and on time.
It doesn’t happen automatically, and you can’t just contact the credit bureaus directly to report your payment – you need the assistance of a third party.
How to get your rent payments reported to a credit bureau
You can get your rent payments reported to one or all three credit bureaus in three ways:
1- use a rent reporting service
2- ask your landlord to report your rent payments
3 - pay your rent with a credit card.
Here are details about how these three options work to help you determine what might work best in your situation.
1. Use a rent reporting service
Renters can sign up with a rent reporting platform or service to report their rent payments to the three credit bureaus. As you evaluate different services, look into how many credit bureaus the service reports to; not every service reports to all three. However, that is where you’ll receive the most benefit from reporting your rent payments. In this way, whichever credit bureau the landlord uses in their tenant screening process, you’ll be sure they have the rent payment history on your credit report.
On some platforms, renters take on the entire responsibility for activating the service, proving they paid rent, and paying any fees the platform charges. Certain platforms may only require your landlord or property management company to verify your tenancy initially, while others require verification of each rent payment.
Platforms like RentTrack, PayYourRent, and Cozy allow tenants to sign up themselves to set up monthly reporting. When renters sign up, they can choose whether to report their past rent payments along with their current activity or simply report payments going forward. Some platforms claim that customers who have submitted past rent payments have gained a 20-point increase in their credit score within just a couple of months.
If you sign up for a rent reporting service, pay your rent on time! Rent reporting platforms may have an on-time option where you can report the payments made on time but leave out any late payments in case you run into trouble one month and pay late. Not all have an on-time option and report every payment whether you’re late or not. Either way, late payments can hurt your overall score because your credit history will show inconsistencies and be a red flag to landlords.
Other tenant-driven rent reporting platforms
To use Rental Kharma, you must rent directly from the property owner or a property management company and not be in a sublet situation. Rental Kharma reports rent payments to TransUnion and verifies your payments with your property manager or landlord. They offer past rent reporting of up to six months. The startup fee is $50, with a monthly charge of $8.95.
RentReporters contacts your management company or landlord each month to verify you’ve made your payment on time. They report rent payments to two credit bureaus, TransUnion and Equifax. The sign-up fee is $94.95, which includes 24 months of past rent reporting. The monthly fee is $9.95.
2. Ask your property manager or landlord to report your rent payments
Your landlord can sign up with a rent reporting service and report rent payments on your behalf. If they are not already signed up with a service, you may need to make the case that by reporting on-time rent payments, they will encourage their tenants to pay their rent on time because it will help build their credit score.
TransUnion will allow landlords to sign up for ResidentCredit and report directly. Rent reporting platforms like Esusu and Pinata report to all three credit unions. Credit Sesame and MoCaFi report to Experian and TransUnion.
3. Pay rent with a credit card
If you’re having difficulty getting your landlord or property manager on board with reporting rent and don’t want to sign up for yet another subscription, consider paying your rent with a credit card if your landlord or property manager accepts this form of payment. With the right card, you could earn rewards points or miles – just be sure to pay your credit card bill on time each month.
Some property managers and landlords that accept credit card payments may charge an extra fee of 2.5%–3% to offset what their card processor charges them. On a rent payment of $1,200, this fee could amount to an extra $30-$35. If you plan to use a credit card to pay rent, consider that additional amount when considering how much you can pay for rent.
Other platforms allow you to pay them your rental amount with a credit card; they submit a check to your landlord.
RadPad charges 2.99% to take your credit card payment and send a check to your landlord. This platform does not need permission from your landlord for you to sign up and pay rent this way.
RentPayment, PlacePay, and RentTrack charge between 2.95%–2.99% per payment, and link your credit card to your landlord's bank account. Your landlord will need to permit these services.
Which property management software platforms have a rent reporting service?
Platforms like RentSpree provide landlords and property managers with an online payment portal to receive rent payments. Payments go directly into their checking accounts, and tenants can use a credit card to make payments through the portal. If your property manager or landlord does not accept credit card payments, ask them about making online payments through property management software.
This way, tenants’ on-time monthly credit card payments, including their rent, help them improve their credit score.
Why you should start reporting your rent payments
If you are regularly on time with your rent payments, you can improve your credit history by reporting your payments to the credit bureaus. Why not get acknowledgement for being a good tenant? Reporting those payments through a rent reporting service can help raise your credit score over time.
Here are two good reasons to report your rent payments
1. Reported rent payments are a good incentive to make your rent payments on time – Signing up for a rent reporting service will encourage you to make payments on time because that late or missed rent payment can harm your credit. Recording rent payments is an easy way to build credit without incurring debt.
2. Good credit earned from timely rent payments can help you achieve future goals – Rent reporting can add positive credit history to your credit report, showing that you were consistently responsible about making payments. This will help you get approved for credit in the future for things like a car loan, a personal loan, or eventually a mortgage.
If you’re considering moving to a new apartment or becoming a tenant for the first time, ask your potential landlord or property manager if they will help you establish reasonable payment and credit habits by reporting your rent payments.
RentSpree is a property management platform that allows tenants to safely and securely make rent payments, apply for apartments, undergo tenant screening, and sign leases. RentSpree will soon be adding rent reporting to their suite of tenant services, allowing tenants to start, build, or improve their credit scores with each on-time monthly rent payment.