It seems a little bizarre to me that while rent is, for many of us, one of the biggest checks that gets cut each month, it by and large falls by the wayside in terms of being counted on a credit report. There are a couple of credit bureaus out there who take it into consideration, but for the most part it has been an untapped resource for taking a look into renters’ financial histories. Which is silly to me, because paying rent on time is just as important as paying your credit cards on time– at least, I think so. I think that it demonstrates how financially responsible somebody is, and can forecast a pattern: diligently pays rent on time, frequently late, or never pays on time. These are things that ought to be included on somebody’s credit report–for better or worse–but of course I like to hope that the majority of renters will win with this, as they pay rent on time and actually get to reap the benefits of seeing the good mark on their report and watch their score spike up. Until all the credit bureaus get on board with including rent however, renters must fend for themselves and find ways to make their rent checks count. Check out this article from Abby Hayes titled “4 Ways Renters Can Boost Their Credit Scores:”
“Not too long ago, paying rent didn’t have much to do with your credit score. Not paying rent could (and still can) wreck your credit score. If you were behind enough to have your account sent to a collections agency, your past-due rent would likely be reported as negative information to the credit bureaus.
Rental rates in the United States are skyrocketing because of foreclosures, an unstable housing market, and the general hesitance of younger Americans, especially, to buy homes. While renting can be a good option for many, historically it has not been helpful in building a credit score.”
Click here to read about the ways that you can have your rent count towards your credit score.
So if you are a renter, be sure to take advantage of these outlets to get your rent to count towards your score. My hope is that someday, this will be an automatic inclusion but until then renters have to take an extra step. But hey– it’s totally worth it if it helps your credit score out, because the better your score, the lower your interest rates. Which is basically like money in your pocket!