Rent payments might affect your credit score, particularly if you make late payments or you skip several payments. However, not all landlords report payment activity to the three major credit bureaus. If that’s the case with your landlord, rent payments won’t help or hurt your credit score.
Are landlords required to report your rent payments?
Legally, landlords aren’t required to report rent payments to the three major credit bureaus — Equifax, Experian and TransUnion. One reason: Rent payments aren’t considered debt. But some landlords choose to report rent payments, even though it means spending time and money to do so.
Research conducted in 2022 by TransUnion found that 27% of property managers who were aware of the ability to report rent payments to credit bureaus were doing it. But most rent payments go unreported.
The top three reasons that landlords cited for not reporting rent payments were:
- The process eats up too much time (22%)
- Property managers were unsure how to do it (21%)
- Property managers viewed it as too much work or didn’t see the benefit (20%)
Among landlords who did report rent payments, TransUnion discovered these were the top three reasons:
- Helping residents build credit (80%)
- Encouraging residents to make on-time payments (71%)
- Attracting financially responsible tenants (49%)
“We’ve seen some progress in property managers adopting rent reporting in the last couple years; however, there is clearly still room for the number of reporting [landlords] to grow,” Maitri Johnson, vice president of tenant and employment screening at TransUnion, said in a news release.
“With a strong push from Gen Z renters, who make up a significant portion of the renter base today, we’ll likely see reporting become an industry standard — and as a result, a critical mass of renters who can elevate their standards of living through greater access to credit,” Johnson added.
➤ SEE MORE:3 important credit card lessons from Gen Z users
Does renting affect credit?
Versions of the FICO score and scoring versions from one of its competitors, VantageScore, use rental payments that appear on your credit reports as factors for calculating credit scores. Not all credit-scoring models include rent payments, though.
If a credit-scoring model takes rent payments into account, your credit score may go up if you make on-time payments. Or the score might stay the same if you make on-time payments and your score is already high. On-time payments can potentially bump up your credit score by as many as 40 points.
➤ LEARN MORE:VantageScore vs. FICO® Score: A guide to understanding different credit scoring models
How do late rent payments affect your credit?
Late rent payments are another matter.
Experian explains that if your rent goes unpaid for at least 30 days, your landlord or your rent payment service might report the late payment to at least one credit bureau.
But if the landlord or payment service is unable to collect past-due payments, they might turn over the debt to a collection agency. In this case, the agency usually reports the collection activity to credit bureaus.
“A late payment on your credit report can have a significant negative impact on your credit score. However, a collection account can damage your credit score even more because it indicates that the debt has been past due for a while,” says Experian.
In both situations, the black mark can stay on your credit reports for as long as seven years. If several overdue payments lead to an eviction, the eviction itself won’t appear on your credit report.
➤ LEARN MORE:How to dispute and fix credit report errors
Rent payments on a credit card may affect your credit
Some landlords let tenants pay rent with a credit card, while others do not. But even if they accept cards, they often charge transaction fees around 3%. Meanwhile, third-party rent-paying services also allow tenants to pay via credit card, but they usually carry similar processing fees.
If you are interested in paying rent with a credit card, you might consider a Bilt credit card. Bilt offers credit card options designed to let you make rent payments without paying standard credit card transaction fees. Even if your landlord only accepts checks or online bank transfers, payments can still be submitted through the Bilt app, which sends a rent check or electronic transfer on your behalf. Additionally, these cards allow you to earn reward points on your regular rent payments.
Of course, using any credit card to pay your rent can impact your credit score. Making your monthly credit card payments consistently and on time can help raise your score, while missed or late payments can negatively affect it.
How to report your rent to credit bureaus
If you review your credit report and see that your rent payments aren’t showing up, contact your landlord. You may be able to persuade them to start reporting tenants’ rent payments to the major credit bureaus.
If that doesn’t work, consider following the advice of myFICO, the consumer division of the producer of the widely used FICO credit scores, and take matters into your own hands. One way to do this is by using the free Experian Boost service, which might help lift your credit score.
Experian Boost may help with reporting rent payments
Experian Boost lets you add rent payments — as well as telecom payments, utility payments and streaming subscriptions — to your Experian credit report by linking your bank accounts to Experian Boost. However, not all rent payments are eligible.
To take advantage of this service, at least three rent payments within a certain dollar range and within a six-month period must be made to a property manager or rental payment platform that qualifies for the Boost program. At least one of these rent payments must be made within a three-month span.
Only online rent payments are eligible for Experian Boost. Payments by cash, a money order, a personal check or a mobile payment transfer don’t qualify.
Other ways to get rent payments added to credit report
According to myFICO, these are some of the other services that can get your rent payments added to at least one credit report:
- Piñata: Renters can download the free app and get their rent payments reported to TransUnion at no cost. In addition, property management companies can team up with Piñata and offer reporting to all three credit bureaus at a monthly cost of $4.
- RentReporters: RentReporters will report your monthly payments to Equifax and TransUnion going back 24 months and on an ongoing basis. The company plans to add Experian to its lineup.
- Rental Kharma: With a $50 setup fee and a $8.95-per-month fee, you can get ongoing rent payments reported to Equifax and TransUnion, along with payments going back 24 months. You can add a spouse or roommate for a $25 setup fee and a $5-per-month fee.
- LevelCredit: For $6.95 per month, you can get your rent payments reported to all three credit bureaus. You can also add up to 24 months of past payments for a one-time fee of $49.95.
- PaymentReport: For $2.95 per month, you can get ongoing reporting of rental payments to Equifax and TransUnion. You can also add past payments for 50 cents per month. Or you can pay a flat fee of $49 per lease and get 24 months of past payment history and ongoing reporting at no additional cost. For the flat-fee plan, you can add your spouse or roommate for free.
FAQs
Does renting an apartment build credit?
Renting an apartment can build credit, as long as you make timely rent payments for the full amount. But for these payments to benefit you, the payment activity must be reported to at least one credit bureau. This can be done through a landlord or a rent-paying service. If you’re unsure whether your rent payments are being reported to any of the credit bureaus, ask your landlord.
Does applying for an apartment hurt your credit?
Applying for an apartment might hurt your credit, but only temporarily. To approve your application, a property manager might check your credit. This might cause a “hard inquiry” to appear on at least one of your credit reports, leading to a temporary decline in your credit score. Not all rental applications trigger a hard inquiry, though.
