Can Rent Payments Boost Your Credit Score? What You Need to Know

Building your credit score isn’t solely based on using credit cards and paying back existing debt. In recent years, credit bureaus have expanded what they look at when evaluating consumer credit profiles.

You can now boost your credit score with the monthly bills you pay, including your largest line item in your budget: your rent. This is a great way for renters, which currently makes up one-third of American households, to potentially improve their credit scores.

The WorkMoney team put together a quick guide on how you can use your monthly rent payment to bolster your credit score. 

How Rent Reporting Works

Rent reporting is when your on-time monthly payments are shared with credit bureaus, giving you credit for paying your monthly rent on time. This can be extremely helpful for tenants, but only 1 in 5 property managers reports rent payments to credit bureaus. For those who rent from “mom-and-pop” landlords, they likely don’t have the resources or knowledge to report rent payments. However, as more people rent, resources have emerged to give renters the credit they deserve for making on-time payments.

Esusu ensures your rent is reported to all three credit bureaus (Equifax, Experian, Transunion), and the average user sees a 45-point jump in their credit score.

Ways to Get Your Rent Payments Reported

If you want your rent payments to count toward your credit score, you’ll need to make sure they’re actually being reported to the credit bureaus. Here are several ways to do that:

The Credit Impact: How Much Can It Help?

If you’re paying rent on time each month, rent reporting could be extremely beneficial. A study from the Urban Institute found that rent reporting can lead to significant positive impacts. The findings varied across the board, but most notably showed rent reporting increases “the likelihood of having at least a “near-prime” score (a VantageScore of at least 601) by an estimated 12 percentage points.”

Keep in mind that positive marks from paying rent won’t outweigh any negative marks you may have from credit card debt or medical debt. Do your best to address any negative marks while also paying your rent on time.

Here is what makes up your credit score:

Final Thoughts

Paying rent is a significant responsibility, and if you’re among the roughly 90% of people who pay rent on time each month, you should get “credit” for that. However, putting positive on top of negative won’t cancel each other out.

Here’s what you can do today: pull your credit report to see where you currently stand. You can do this for free on Annualcreditreport.com. Do your best to address any marks on your credit report that may be weighing your score down. 

From there, make a plan to address each of those items. After that, consider using a rent reporting tool like Esusu to continue building your credit score.