Does Paying Rent Build Credit?

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Key takeaways

Rent payments can improve your score when reported to major credit bureaus, especially if you’re new or rebuilding credit.
You will need to use a third-party company to report rent payments.
Companies often charge fees, but some landlords may participate for free or offer complimentary reporting.

Millions of Americans pay rent every month, but most don’t get credit for it. Rent payments are not typically reported to the credit bureaus, and so do not appear on credit reports. For renters who are struggling with a low score or no credit history at all, this is incredibly frustrating. The good news is that it’s now possible to build credit by paying rent, thanks to rent reporting services.

Rent reporting services ensure that your payments appear on your credit report. On-time payments can improve your payment history and boost your score. The higher your score, the more borrowing options you’ll have.

The best services charge a fee, but the benefits may be worth the extra cost. Here’s what you need to know about reporting rent to build credit.

Does renting an apartment build credit?

Rent payments are not traditionally reported to the credit bureaus since they are not a form of borrowing. Institutions usually only report activity from cards and loans. That said, rent can still affect your score.

Credit bureaus will include rent information on your credit report if they receive it. It makes sense to add it, since paying rent on time is a good indicator that you’ll pay other bills on time.

Landlords and property managers can report your monthly rent payments on their own. Many do not take this extra step. But you can get your payments recorded when you use a rent-reporting service.

What are rent reporting services?

Rent reporting services are third-party companies that send information about your rent payments to the major credit bureaus. The bureaus then put the data on your credit reports.

Adding timely rent payments to your reports increases your positive payment history. Payment history is the most significant credit scoring factor, making up 35% of your FICO score. Adding to it can significantly bump up your score with minimal effort.

Many of these services charge fees, though a few are free. You may be able to sign up for one on your own. Or you may need your landlord’s participation. It depends on the company.

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How to add utility bills to your credit report

You can also add utility bills – water, gas, electricity, phone, and even subscriptions – to your credit report. Like with rent, you’ll need to enroll in a third-party service that reports these payments.

Some utility companies may already report payment history to credit bureaus. Check and see if your provider does so first.

Do rent payments affect your credit score?

Rent reporting services will get your payments on your credit report, but they won’t always affect your score. You have multiple credit scores from each of the major bureaus – Experian, Equifax, and TransUnion – and credit scoring models. The main scoring models are FICO (used by 90% of lenders) and VantageScore.

Newer versions of FICO (FICO Score 9 and 10) and VantageScore 3 and 4 take rent payments into account. If your lender pulls any of these scores, they will see an improved number thanks to your on-time payments.

FICO Score 8 – a commonly used score – does not include rental payments when calculating the number. Nor do the FICO scores commonly pulled for mortgage applications or auto loans.

It is frustrating that many credit scores do not include this information. The good news is that while the numbers won’t reflect your rent payments, lenders will look at the data on your reports as well. They will see a history of on-time payments every month, and this will reflect positively on you.

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How to enroll in a rent reporting service

Anyone can enroll in a rent reporting service, but you may need your landlord’s cooperation. You also need to double-check that the service will be worth the fees.

Talk to your landlord

Start by talking to your landlord or property manager. Ask if they already work with any rent-reporting services. Some property owners may already have a connection with a service, making the process easier. They may even be willing to report rent themselves.

Suppose they don’t. In this case, discuss the possibility of enrolling them in a program. Depending on the service you choose, your landlord may need to create an account or take the time to respond to monthly requests. Make sure that they are willing to participate

Research different companies

Look into various services available. Consider factors such as cost, reputation, and ease of use.

Questions you should ask before signing up:

Can I cancel at any time?
Do you report payments to all three credit bureaus? (Use a service that reports to all three, as you never know where a lender will pull your score from.)
What happens if I’m late or miss a payment?
Will you retroactively report on-time rent payments? (Some services will report up to two years of rental history)
Do I need to pay rent through the service or directly to my landlord?
Can I pay rent with a credit card, and will it count?
How much does the service cost? (There may be an initial set-up fee and a monthly charge)
How do you verify rent payments? (Some will verify payments with the landlord, while others will check your bank account.)

Sign up for a rent reporting service

Once you’ve chosen a company, sign up. Some services allow you to report past payments for up to two years. If you have this option, take it. Retroactive reporting will give your score an immediate boost.

You may need to pay through the service rather than directly to your landlord. If this is the case, ensure your landlord is set up to receive payments. Then, confirm that they got paid so there is no misunderstanding.

Check your credit reports and scores

After you make your first payment with the service, wait 30 days. Then, check your credit reports to verify that the payment is now listed. As more payments are reported, your score will grow.

When is rent reporting worth it?

Rent reporting is a good idea if you always pay on time. It is an easy way to add positive payment behavior to your report. Reporting positive rent payments is especially helpful for anyone seeking to establish their credit history or rebuild their score. The lower your score, the bigger the boost it will give. Some people prefer rent reporting to taking on a loan or credit card that may encourage additional spending.

If you already have a strong credit score, adding monthly bills to your payment history won’t help too much. In this case, you should continue to make on-time payments and keep your credit utilization low – below 30% of your limit.

Before you decide to engage a service, make sure that it is affordable. Adding monthly bills to your reports won’t help if you can’t afford the fees. If the fees are too high, consider alternative ways to make a positive impact on your score. You can ask a trusted friend or family member to add you as an authorized user or take out a credit builder loan.

Did your score suddenly drop?

Find out why and what you can do about it.

Does paying rent late or missing payments affect your credit?

Missed payments typically do not appear on your credit report, but it all depends. Most landlords and property managers will not report them. Check your rental agreement, ask your landlord, and find out the rent reporting service’s policy.

If your rent is exceptionally late, your landlord may sell it to a debt collection agency. The collection agency will report the overdue bill to the credit bureaus. At this point, it will appear as a negative mark on your report, damaging your score. The best thing you can do is pay the bill as soon as possible.

Frequently asked questions

1. How can you add rent payments to your credit report?

You can add payments to your report using a rent reporting service. These services report your rental payment history directly to major credit bureaus. Reporting monthly payments helps you build a positive payment history.

2. Does paying utilities build credit?

Paying bills can build credit when payments are reported to the bureaus. Some rent reporting services allow you to add utility payments, phone bills, subscriptions, and other monthly bills to your credit file. Adding these payments can further boost your score.

3. Are there free rent reporting services?

The cost of rent reporting services varies widely—a few offer free options, but most charge an one-time fee followed by a monthly fee.

4. Do I need my landlord’s approval to report rent payments?

In most cases, you don’t need your landlord’s approval to report rent payments. Many services allow tenants to enroll independently and verify payments by examining their checking accounts. Others do require the landlord’s cooperation to confirm payments.

5. Can I rent an apartment with poor score or no credit history?

It depends on the landlord. Some landlords do not check credit. If your landlord does consider your score, he may require additional steps. You may need to put down a larger security deposit, find a co-signer, or show proof of stable income to be approved.

Bottom line

You can build credit by paying rent, but it is not the most effective way to boost your score. Rent reporting works best for consumers with little to no credit history. In this case, every little bit of positive payment information will give your score a boost. A history of on-time rent payments (and other monthly bills) is valuable data for potential lenders and, of course, future landlords.

Other credit-building strategies are more efficient since they influence all credit scores and are reported to all three credit bureaus. You can take out a credit builder loan. Loan payments are reported, and you get the money once it’s paid off. Apply for a secured credit card, which is easier to be approved for due to the security deposit. Or become an authorized user on someone else’s card and benefit from their good score. All three will help you establish a positive payment history.

When you need to build credit, know you have plenty of options. It takes time, but your score is constantly updated with new information. Pay your bills on time and won’t be stuck with a low rating for too long.

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Rachel Alulis

Rachel Alulis has been the lead editor for Moneyfor's credit cards team since 2015 and for the financial rewards team since 2023. Before joining Moneyfor, Rachel worked at USA Today and the Des Moines Register. She then established a successful freelance writing and editing business specializing in personal finance. Rachel holds a bachelor's degree in journalism and an MBA.

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Does Paying Rent Build Credit?

Key takeaways

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Does renting an apartment build credit?