Could Reporting Rental Payment History Improve Your Credit Score?
For years, individuals who rent their homes and have clean payment histories have not been able to reap the benefits of their good payment habits. Now, Experian is offering a new product that allows renters to apply their rental payment histories to their credit scores, and several other companies now offer products that help convert rental data into a format compatible with Experian’s reports.
A good credit score is the gateway to the American Dream, and people with good or excellent scores are able to secure consumer loans, are eligible for credit cards with low interest rates and are awarded with the lowest interest rates the mortgage industry offers.
For those with low credit scores or no score at all, the gateway to these financial rewards is closed. Often, those who rent fall into this category, sometimes because they are just starting out or are recovering from filing for bankruptcy. Allowing renters who have always paid on time to apply their payment histories to their credit scores will allow them to rebuild credit and eventually be eligible for a mortgage. Since one-third of the nation are renters, adding rent payment data to credit scores will give consumers and lenders a more realistic understanding of someone’s fiscal habits.
Though adding rental payment history can help build credit, it can have drawbacks. First, the rent data services are not free. Websites that offer to streamline rental data so it can be used by credit report companies charge fees for this service. For those who are struggling with a low credit score due to bankruptcy, the costs of adding rental payment histories to credit scores may be more expensive than obtaining a secured credit card, which can also help someone build credit. The rent data program is also quite new and only available through Experian.
For those who are struggling to build credit after bankruptcy but have managed to make their rental payments in full and on time, adding rental payment histories to credit scores can help build credit and recover from the hit that filing for bankruptcy inflicts on credit scores. If you or a loved one have recently filed for bankruptcy and would like to add rental payment histories to your credit score, please contact an experienced bankruptcy attorney.