Personal Finance
Building Credit By Including Your Rent Payment History
Every month, millions of Americans pay their rent in full and on time — and shouldn’t that count for something? Instead, with while credit reports and scores often factor in payments made on loans, credit cards, etc., rent payments are typically excluded. However, that is starting to change.
This is actually an issue that now Vice President and then-presidential candidate Kamala Harris brought to light during her 2020 campaign. Citing statistics that show 26 million Americans are “credit invisible” while another 19 million have credit files too thin to score, Vice President Harris proposed an amendment to the Fair Credit Reporting Act that would require bureaus to include rent, phones, and other utilities in payment histories and credit reports. While considering such payments in credit scores may not be a widespread practice, there are now several services that can help you earn credit for paying your rent on time.
Let’s take a basic look at how rental reporting works, a few companies that offer such services, and a few pros and cons to consider.
How Rental Reporting Works
How Rental Reporting Works
Improving your credit
The idea behind rental reporting is that your monthly payments are included in your credit report, helping you establish a positive payment history. Since payment history is the single largest factor in calculating your credit scores, you can see why these services can be beneficial.
Working with your landlord
One problem inherent to rental reporting is that your landlord must be willing to verify your payments. As you’ll see in the fine print of services we’ll be discussing in a minute, they are unable to report rental payments unless they are verified. Therefore it may be a good idea to speak with your landlord or rental management company before signing up.
How many points will your credit score rise?
As you can imagine, there are several factors that go into determining your credit scores. For that reason, it’s difficult to say what impact rental reporting can have. That said, some of the rental reporting companies do offer some insight, with Rental Reporters and Rental Kharma both saying many of their customers see increases between 35 and 50 points. Moreover the latter notes that some of their customers who had no credit scores before using the service saw scores jump “to the mid 600s” after adding two years of rental payments to their reports. That said, the higher your credit score already is, the smaller the impact of rent reporting is likely to be.
Obviously your mileage may vary so you’ll definitely want to consider whether these potential results are worth the monetary investment.
What about late payments?
Since the point of rental reporting is to increase your credit score, it wouldn’t be great if you had late payments being reported. However, it’s worth discussing what qualifies as “late.” Both Rental Kharma and Rock the Score note that rent payments will only be reported as “late” if they are more than 30 days delayed. That said, it is a best practice to pay your rent on time in order to get the most benefit out of rental reporting services. Otherwise, you could end up hurting your credit instead of helping.
Popular Rental Reporting Companies
Popular Rental Reporting Companies
These days, there are several rental reporting companies that can help tenants build their credit by recording their payments. Unfortunately, these services do typically come at a cost. In addition to upfront fees for applications, set up, etc., most also charge a monthly service fee. On the bright side, they may have the option to include previous payment history as well as future installments.
With that, let’s take a look at three rental reporting companies, their policies, and some of the pros and cons of each.
| Company | Initial Fee | Monthly Fee | Credit Bureaus Reported To |
 | $94.95 | $9.95 | TransUnion, Equifax |
 | $50.00 | $8.95 | TransUnion |
 | $48.00 | $6.95 | TransUnion, Equifax |
Rent Reporters
Perhaps the most aptly named of the three, Rent Reporters provides your payment data to TransUnion and Equifax. With an initial fee of $94.95 and monthly fee of $9.95, the service isn’t the cheapest on the list but does carry strong reviews. If you do want to save some money, you can opt for the annual plan instead, which is around $95 ($7.95 a month) paid upfront plus the $94.95 one-time fee.
While their main set-up fee includes up to two years of rental payments with your current landlord, those who’ve lived elsewhere in the past two years can also request to have the company verify payments to other landlords at a cost of $50 each. Plus, if a roommate or spouse would also like to sign-up for Rent Reporters, they can join for a discounted rate.
In terms of results, Rent Reporters says the average credit score increase among their customers is 35 to 50 points. Rent Reporters’ site also notes that, if users aren’t satisfied with the results they see within 48 hours after they are added to your credit report, they’ll issue a full refund. You can also cancel your service at any time, although their terms of service state that you must call to do so.
Rental Kharma
A rental reporting company that comes at a bit of a discount to what Rent Reporters charges is Rental Kharma. However, Rental Kharna only reports to one credit bureau: TransUnion. Oddly, despite mentioning in their FAQ that Equifax now accepts rent payments, another FAQ answer suggests that they don’t yet report to them. Meanwhile, on the company’s website, they note that users can see improvement in their credit in as little as two weeks and also boasts relatively strong reviews on Facebook.
In terms of cost, the service currently charges an $8.95 monthly fee as well as a $50 set-up fee. Notably, this set-up fee includes reporting of all of your past rental payments — but only at your current residence. Rental Kharma also allows you to add a roommate or spouse for an extra $25 set-up fee and an additional $5 monthly fee.
Rock the Score
One thing you may notice about Rock the Score from the table above is their relatively low initial fee of just $48 (it was actually $25 in the past but is now more in line with Rental Kharma’s fee). However the downside here is that there’s actually an optional $65 fee if you’d like the company to also report your past rental history at your current location.
Like with other rental reporting companies, Rock the Score will need to verify your payments with your landlord. In the event they are unable to do so, their “Rock Solid Promise” states that you won’t be charged. Luckily, while eligibility is contingent on your landlord’s verification, they note, “Our reporting system works with almost all rental situations across the entire US.”
Credit Sesame Turbo
Another option I wanted to mention comes from the free credit score site Credit Sesame. As part of that platform’s premium subscription, they now offer rent reporting to Transunion and Equifax. This particular feature is apparently called Sesame Turbo.
However, oddly, not much information about this service is currently available on their site outside of the FAQ. In fact, I’m not even 100% sure how much a subscription costs — although it seems to be part of their $15.95 subscription. Meanwhile, I should also mention that Credit Sesame has a debit card that can help you build credit as well.
In any case, while I like Credit Sesame overall and could see this being a good option, I really wish there was more information publicly available. Perhaps this is still a beta feature that will roll out further but, in the meantime, it may be worth looking into if you’re already a Sesame customer.
Other services
Although the three services mentioned above are some of the most popular and straightforward, there are other rent reporting companies out there. The problem is that some offer their services through landlords and rental companies, meaning that individual renters can’t sign up by themselves. If your landlord or rental company does participate in other rental reporting programs, it may be worth considering as some of these services may be discounted and some even report to all three major credit bureaus.
There are also some companies that employ different methods for recording your rental payments. For example there are services where the tenant pays the company directly and then they write a check to the customer’s landlord. In other words, not all of these services are equal or operate in the same way, so be sure to read all of the provided material including the services’ FAQ section to ensure you fully understand the process.
Overall pros and cons
When deciding to sign-up for a rental reporting service, there are a few things to consider. Clearly the cost is chief among those factors. In addition to the initial set up fee, each of these services charges at least $6.95 a month, which adds up to more than $80 a year.
Another potential issue to consider is that the three rental reporting companies we looked at today only report to one or two of the major credit bureaus. This could cause an issue if you apply for credit and the company pulls a report from one of the bureaus that hasn’t been receiving your reported rent payments. What’s more, it’s usually not terribly easy to know what report a creditor will pull ahead of time. Therefore, if possible, you’ll want to look for services that do report to all three.
Rental payment reporting is certainly not a standard practice (yet) but it does exist in some capacities. From services like Rent Reports, Rental Kharma, and Rock the Score to other options that may be offered through your landlord or rental company, you may be able to earn credit for your monthly rent payments. Ultimately, before signing up for one of these services, you’ll want to consider the cost, the number of credit bureaus they report to, and of course whether or not your landlord will verify your payments.
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