Did you know that paying rent online can improve your credit score? In 2017, TransUnion studied 12,000 renters who reported their rent payments to credit bureaus over the course of a year. The study found that renters’ scores rose an average of 16 points within six months; the benefit was greatest for those who started with a credit score below 620.
You too can improve your credit through online rent. Doing so will record your payments, report the information credit bureaus are looking for, and allow you to improve credit by using a credit card as well. Here’s how.
Online Rent Records Payment History
“When you have a credit card or a car loan, you don’t need to think twice about having your payment history information reported to the credit bureaus. It just happens,” says Abby Hayes at DoughRoller. “Not so when it comes to rent.” So how do you make sure your rent payments are reported?
Make Sure You Opt-in
Even if your apartment complex or landlord advertises rent payment reporting, make sure that your payment records are actually being sent. You’ll often have to give your landlord permission or specifically ask for that reporting to happen.
At The Circle Apartments, we value your privacy. Because your payment history is private information, we encourage you to opt in and allow us to send records of payment history to the credit bureaus so you can get the most benefit out of paying your rent on time. We offer an online rental payment system that reports information to the credit bureaus. This will provide a record of your on-time payments and contribute to your credit score! Your online rent can be accessed through the resident portal.
A credit score isn’t something most people think about too often, but it can have a huge effect on your future financial plans. A good credit score can affect interest rates on car loans, credit cards, and even future mortgage rates. Building a good credit score by paying rent on time and having it reported could save you thousands of dollars down the road.
Online Rent Reports Important Information
Paying your rent online is not only going to record a history of your payments, but it will provide credit bureaus with the information they are looking for. So what actually goes into a credit score? Experian, for example, determines credit scores through the following elements:
- Use of credit cards
- Payment history
- Applications for new loans and credit
When you pay rent online, those payments will become part of your payment history. As you pay on time and in full and continue to do so, that becomes part of your score, too.
Combine Credit Cards with Online Rent
To boost your credit score more, consider using a credit card when paying online rent.
“Open a credit card and use it to pay your rent . . . then pay your credit card balance in full each month,” says LaToya Irby, credit expert for The Balance. “The timely credit card payments will help boost your credit score.”
While using a credit card to pay online rent is not required, it can be an easy way to contribute to your credit score.
As you pay rent online, your payments are reported to credit bureaus, showing them exactly what they are looking for. Plus, if you choose to pay rent with a credit card, you may increase your score even more. Happy credit-score-boosting!