Can I Build Credit by Paying My Rent on Time?
If you do not have much of a credit history, you can expand it by paying your rent on time, according to credit reporting bureau Experian. The bureau considers rental payment information that is reported to their Experian RentBureau in their credit reports. This means that timely rent payments will be incorporated into your standard personal credit report. Some credit scores will take this rent payment history into account.
Such positive rent payment history helps you to rebuild or establish first time credit history.
The way it works is through either the property management company or the electronic rent payment service providing the information to Experian Rent Bureau. They update this information once every 24 hours. It is important information for companies that do resident screening when you apply to be an apartment resident.
Communication companies, auto finance firms, and banks will also consider this item on your credit reports when they are evaluating credit worthiness.
You may need to ensure that your rent payments are being reported to the major credit bureaus. If you are about to rent or are already renting, ask the property management company if they report rental payment information to the bureaus. Should your property management company or landlord not report this data, you can enrol in a rental payment service that works with the bureaus (like Experian Rent Bureau).
Not only do these services report your history of rental payments to the credit reporting bureaus, but they also make it easy to pay your rent electronically through your bank. Some of the major companies that provide this service are Rent Track, Pay Lease, eRent Payment, Pay Your Rent, and Clear Now.
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