Nontraditional payment histories like rent and utilities can be reported to the credit bureaus for a fee. Pay-for-data reports allow consumers to have nontraditional monthly payments reported to major credit bureaus but it must be done through a third-party.
Companies like Rent Reporters collect and report rent data. For a fee that data can be reported to the credit bureaus. Experian and TransUnion both include rent data on your credit report, but you can’t report that data yourself. That’s where a third-party agency like Rent Reporters gets involved.
How Rent Reporters Works
Landlords report your monthly rental payments to Rent Reporters. Rent Reporters validates your rent payments then sends the information to the credit bureaus. Rent Reporters reports positive and negative payment data to the credit bureaus.
The catch is that property owners are not required to participate in this reporting. Small landlords generally do not participate because of the time and money involved. But a large rental conglomerates more often will.
Benefits of Rental Payment Reporting. Consumers with poor credit or little credit can build credit history by paying rent and getting it reported. Help build your credit history simply by paying your rent on-time. Payments will show up on your credit report which can help your overall credit standing to lenders viewing your credit reports.
Drawbacks of Rental Payment Reporting. Having your rent reported to the credit bureaus will not help your FICO score. Late payments as well as on-time payments will be reported. Even though the rent data is not calculated into your credit score, it will not look good to have negative rent data on your credit reports. And, if you ever get sent to collections for defaulting on your rent, that collection agency notation will calculate into your credit score.
Vantage Credit Score. While the traditional FICO score does not take rent payments into account the less-widely-used VantageScore does. Vantage Score is the credit score created by the three major credit bureaus – Experian, Equifax and TransUnion. The new version of VantageScore can potentially boost scores for many credit applicants because it will weigh rent and utility payment records. The only problem is not many lenders use VantageScore to make credit decisions. FICO remains the most widely used credit scoring model. Learn more about Rent Reporters here.