Paying your rent on time might finally boost your credit score

By Virginia K. Smith | April 24, 2015 - 9:59AM

It's long been an infuriating fact of adult life that while your credit score can make or break your application for a rental or mortgage, your history of rent payment has nothing to do with your credit score. 

But this is slowly changing, as more landlords report rents to credit-reporting bureaus, and more services crop up to make it easy for them to do so, The Real Deal reports. Sites like RentTrack, ClearNow, and PayYourRent all allow you to pay rent online, your landlord to collect it, and the transactions to be reported to the appropriate credit bureau. Besides added convenience, this could be a major boon to renters: Studies from these services found that tenants previously considered "unscoreable" all became "scoreable" (and usually had solid credit scores) after several months with reported rents. On top of that, tenants who already have credit scores generally saw their credit scores improve once rent payments were factored in. (If you're landlord isn't already using one of these systems to collect rent, they're relatively easy to set up, and hey, it can't hurt to ask.)

This all comes on the heels of news that the Fair Isaac Corporation (FICO) will start to factor in data like cell phone, cable, phone, gas, and electric bill payment into its scores, which are often used to deem applications mortgage-worthy. All of which is very good news whether you're credit card-averse, or just new to the market and looking to build up your profile. After all, you work hard to pay the bills every month. Shouldn't you be getting a little more credit?


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