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Can paying rent add to your credit?
Yes, it is possible to build your credit by getting your monthly rent payments reported to credit bureaus. Most landlords don’t bother to report these which leaves a huge missed opportunity for renters. Regular on time payments of your rent can have a huge boost to your credit scores. This can be especially helpful if you are looking to build your credit or improve your score in advance of buying a home.
How to build credit with rent payments
If your landlord or rent management company haven’t signed up for a rent reporting service, the 3 major credit bureaus (Equifax, Experian and TransUnion) won’t put your rent payments on your credit report. Only a certified data furnisher can report rent payments to credit bureaus. That means your credit score and credit report aren’t affected by your rent payments.
You really have 2 options here:
1) Ask your landlord to report these through a service. Your landlord will most likely incur a cost to do this through a rent reporting service. Landlords with Fannie Mae-financed buildings can participate in the Positive Rent Payment program at no cost.
2) Report these yourself through a rent reporting service. Most of these services do charge you a direct fee so you need to take that into consideration. The fees are generally pretty low for the score increase you receive. Some of these rent reporting services will also report many years in back rent payments which can have a dramatic increase on your credit score. This can be especially helpful if you are looking to buy a new home. The credit score increase may get you a much better interest rate or qualify you for a larger home loan.
Rent Reporting Services
A rent reporting service is a third party service that reports your rental payment history to the credit bureaus. They report to either all or some of the major credit bureaus (Equifax, Experian and TransUnion). Most of these services do this without you having to approach your landlord. Some also have a priority service for an extra fee to have past rents posted quickly to your credit report.
Below are our top 3 rent reporting services:
| Reporting Service | Reporting History | Setup Fee | Monthly Fees |
|---|---|---|---|
| Rental Kharma | 24 months – Unlimited | $ | $8.95 |
| Level Credit | 24 months | $49.95 | $6.95 |
| Rent Reporters | 48 months | $94.95 | $9.95 |
Rental Kharma
Rental Kharma is an excellent service that offers a 90-day 100% satisfaction guarantee. You have up to 90 days from the time Rental Kharma reports your initial rent payment history to the credit bureaus to request your refund. This really shows the commitment to boosting your credit. They claim an average credit score increase of 40 points. Their slogan is no credit score to 600-750 in 3 Days.
The reporting standard period starts at 24 months but if you’ve been renting the same property for say 7 years, you can get all of it reported for an extra fee of $60.
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Rental Kharma has a 4.8 TrustPilot rating with 1,100+ reviews. This is the highest by far of any of the rental reporting services on the market.
Level Credit
Level Credit is own by Self, an established company offering many products to help build credit. They do report rent up to 24 months for $49.95 to all three of the credit bureaus. LevelCredit promises only to share positive data with the credit bureaus. If the software can’t find your payments in a given month, it won’t report any data for that period. That shouldn’t negatively affect your credit score.
The $6.95 monthly plan also includes adding additional items you pay like cell phone and utility payments to your Transunion report. You can also do this directly through Experian’s Boost program for Free though.
Rent Reporters
Rent Reporters is another good service with a well established company. They are a little pricier than the others for the setup fee but competitive on the monthly fees. They do offer a refund if you are not satisfied within 7 days following the initial rent history being reported.
