Will Rental Payments Be Included on Credit Reports?

, , ,
rent


The dream of owning your own home is quickly changing. Many people nowadays do not, or cannot, own a home for a variety of reasons including rising student loan debt, the need for more flexibility, and rising property prices.

Whatever the case is, many people are just not buying homes, which means no mortgage payments. This has led to many people wondering whether their rental payments are included on their credit reports.

Generally, rental payments are not included in your credit report. This article will answer when rental payments are and are not included on a credit report, and  how you can ensure that they are.

Why Rental Payments are Not Usually on Your Credit Report

First, rental payments are usually not on a credit report, and this frustrates many renters since rental payments are similar to a mortgage payment since they both basically come down to paying for a place to live.

The reasoning behind this is simple. Most landlords do not report payments to a credit reporting agency. They might report if you fail to pay, but they usually will not report on-time payments. They simply have no incentive or legal obligation to do so, which means that they generally do not. This is especially true if you rent directly from the property owner or the property owner uses a property manager.

However, some landlords do report your rent to the major credit bureaus. This is most common when a landlord uses a property management company that utilizes a rent payment service that automatically reports to the bureaus.

You will most likely encounter this if you rent an apartment from an investment group that owns a large amount of apartments. If you rent from the owner, then do not expect any reporting to the credit bureaus.

Why You Want Rental Payments on Your Credit Report

Many renters want their rental payment on their credit report because most renters pay on time and have rental payments that are very similar to a mortgage payment.

It would look great on your credit report, which would make it easier to qualify for a mortgage if you ever want to stop renting. Plus, it could help increase your credit score if you always pay on time. It can even make it look better if you forgot to pay your credit card bill one month.

Now, not everyone wants their rental payments on their credit reports. For instance, renters that are chronically late paying the rent or those that frequently move might want to avoid reporting their rental payments. It just does wouldn’t look good.

However, most renters that pay on time will want to include their rental payments on their credit reports. The next section will cover how rental payments can help you build credit.

Credit Report

How to Get Your Rental Payments on Your Credit Report?

Getting rental payments on your credit report requires some amount of legwork. However, no updates are required once the process has been completed. It is all automatic at that point. The apps and services listed here will help you report your rent to the major credit reporting agencies.

Some of these services charge a fee, or they require your landlord to be signed up for the service. Others are free services that monitor your bank account and report to the credit agencies. The free services will require a copy of your rental agreement to report the payment to the credit agencies. Otherwise, the service will not know that you have paid.

Some of these services will allow you to choose the credit agency that you want to report your rent payment and others will automatically report the rent payment to all three agencies or just one agency.

Unfortunately, most of these options are only available with the approval of your landlord. The best course of action is to ask your landlord if they have any way to report rent payments to the credit bureaus. They will often work with one of the services listed below to report rent payment, but you typically have to ask for them to do it. It is typically not something they advertise.

Pinch

Pinch is a service that monitors your bank account. If you upload a copy of your rental agreement, then Pinch will report your rental payments to the major credit bureaus. This is a free service.

PayYourRent

This is a service that property managers use to keep track of rental payments. It also has the benefit of reporting to the major credit bureaus. However, it does have fees that are usually paid by the renter, but sometimes the property management company will pay the fees. This just depends on how you pay your rent.

Cozy

Cozy is a full software suite that many landlords use to help keep organized. It also allows tenants to pay rent via their bank account, which means no having to write checks.

The best part is that Cozy does not charge any fees to the tenant. The landlord does have to pay a monthly fee though.

Experian RentBureau

Of course, your landlord has the option of reporting payments directly to the credit bureaus. Experian has Experian RentBureau solely for this purpose. You can ask your landlord or property manager to sign up for this program and your on-time rents will show up on your Experian credit report. This is another way that you can start building good credit.

Final Thoughts

Overall, paying your rent is something that you should be able to report to credit agencies, but unfortunately, it is not commonly practiced. It is certainly a debt that you owe, so it should be reported. Plus, it is often costs the same or more than paying a mortgage.

Some lucky people will have landlords that report rent to the credit agencies, but for those not in that position there are still options. The services listed above will work great for credit reporting. However, some of them will simply not be available to you depending on your landlord. In that case, you can manually report your rent with a service similar to Pinch listed above. In other cases, it may be difficult to get approval for renting due to bad credit. If this is the case, give our credit specialists a call to see if we can help you.

 

Carry on the conversation on our social media platforms. Like and follow us on Facebook and leave us a tweet on Twitter.





Source link

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *