Does Paying Rent Build Credit?

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Key takeaways

There’s no set credit score to rent a house or apartment, but landlords generally prefer at least fair credit.
Rent payments can improve your score when reported to major credit bureaus, especially if you’re new or rebuilding credit.
Rent reporting 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 credit score do I need to rent an apartment?

There is no universal minimum credit score for renting an apartment. That said, most landlords prefer a score of 620 or higher. Some landlords accept lower scores, especially for private rentals. High-end luxury apartments or those in high-demand areas often require a score of 700 or above.

Landlords may hesitate to rent to applicants with a 600 credit score or lower. If your score falls in this range, you may need a larger security deposit, a cosigner, or other assurance of your ability to pay.

How to report rent payments to the credit bureaus

To report rent payments to the credit bureaus, use a rent reporting service. These services partner with landlords or property managers to report rent payments to one or more of the three major credit bureaus.

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.

Does rent 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.

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FICO Score 8 – a commonly used version – does not include rental payments when calculating your score. 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.

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.

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 if you’re credit invisible or have a low 500 credit 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, which may encourage additional spending.

If you have a credit card, use it responsibly and report rent for a bigger impact. The best way to use a credit card to build credit is to always pay on time and spend less than 10% of your credit limit. Follow those two rules, pay your rent on time, and your score will go up.

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 making on-time payments and keep your credit utilization low.

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. Certain buy now, pay later services also let you build credit with on-time payments.

Did your score suddenly drop?

Find out why and what you can do about it.

Does late rent affect your credit score?

If your landlord reports on-time payments, they will likely report late payments as well. If they report the late payment to the credit bureaus and it goes on your credit report, it will hurt your score. 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. Does rent reporting help your credit score?

Reporting rent can help your credit score, especially if you have a limited or no credit history. On-time rent payments can add to your positive payment history, increasing your score.

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 a 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 strategy. 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 use a credit builder loan to establish a history of on-time payments. 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.

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

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30. Based on a representative study conducted by Experian®, members who made their first purchase with Credit Builder between June 2020 and October 2020 observed an average FICO® Score 8 increase of 30 points after approximately 8 months. On-time payment history can have a positive impact on your credit score. Late payment may negatively impact your credit score.

31. On-time payment history may have a positive impact on your credit score. Late payment may negatively impact your credit score. Chime will report your activities to Transunion®, Experian®, and Equifax®. Impact on your credit may vary, as Credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations.

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42. To be eligible for MyPay, you must receive qualifying direct deposits to your Chime Checking Account as set forth in the MyPay Agreement. A qualifying direct deposit is a deposit from an employer, payroll provider, gig economy payer, government benefits payer, or other permitted source of income by Automated Clearing House (“ACH”) or Original Credit Transaction (“OCT”). Your MyPay Credit Limit and Maximum Available Advance may change at any time. MyPay is a line of credit and available limits are based on estimated income and risk-based criteria. Eligible members may be offered a $20 – $500 Credit Limit per pay period. Your Credit Limit and Maximum Available Advance will be displayed to you within the Chime app. MyPay is currently only available to eligible Chime members in certain states. Other restrictions may apply.

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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?

What credit score do I need to rent an apartment?