A New Way to Improve Your Credit
When it comes to credit history and credit score, renting doesn't get much respect. Unlike homeowners whose credit benefits from on-time mortgage payments, renters don't see any positive effects on their credit from making rent payments on time. But that's starting to change.
Experian now is including rental payment histories in its credit reports and scores. That's because it recently bought RentBureau, a credit bureau that receives rental payment histories from apartment owners and managers.
The database includes more than 8 million renters -- just a fraction of the nation's 96 million renters. But those included in the database who make on-time rent payments now have a way to improve their Experian credit score. “Given that one-third of the U.S. population rents, we felt it was imperative to reflect the true creditworthiness of those individuals who responsibly pay their rent,” said Brannan Johnston, vice president and managing director, Experian RentBureau.
In the past, only negative information about renters (such as evictions) has been reported to the credit bureaus, says Bill Hardekopf, CEO of LowCards.com and author of The Credit Card Guidebook. Experian and RentBureau now give apartment owners incentives to report rental payment histories because, in return, they get access to a large database to screen applicants. To find out if your rental payments are being reported, ask your apartment manager.