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Does Paying Rent Build Credit? New Rent Reporting Services

Does Paying Rent Build Credit? New Rent Reporting Services

Did you know that although your rent payment is probably one of your largest monthly expenses, it doesn't count toward your payment history or any of the other contributing factors to your credit score? That doesn't sound quite fair considering homeowners get credit for their monthly mortgage payments. Fortunately, things are changing.

Paying rent can build credit if your landlord reports the payments to credit bureaus. Since landlords don't typically report this activity, you can now use a rent reporting service to do it for you. Adding on-time rent payments to your credit report can boost your score by as much as 100 points.

That's a pretty significant increase when comparing it to many other credit-building techniques that only produce a small bump in your score. So, if you're ready to enjoy the benefits of self-reporting, keep reading. We'll cover how you can leverage these services for credit-building purposes while gaining a snapshot of some of the best new rent reporting services available today.

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How to Report Rent to Credit Bureaus

Since rent is a recurring monthly bill that can help you demonstrate financial consistency when it comes to paying accounts on time, several companies have stepped into the gap with apps that allow you to report rental payments to the three main credit bureaus: namely TransUnion, Equifax, and Experian. Some will even let you report payments for utilities like gas, electric, water, cable, cellphone, and streaming services.

Although each service has its own protocol, the process generally works as follows:

Step 1: Enroll in your preferred rent reporting service

Step 2: Verify your landlord and rent payments

Step 3: Report past payments and ongoing monthly payments

Step 4: View your new and improved credit score in just weeks

While all three credit bureaus accept rent payment information to include in your credit reports, it's vital to note that not all credit scores consider this data in their calculations. FICO's older scoring versions, for instance, don't take rent payments into account. Newer versions, including FICO 9 and FICO 10, do. VantageScore, a FICO competitor, also considers rent payments.

When a score does factor into your rent, what can you expect in terms of a credit boost?

Each payment creates a positive tradeline on your report, thereby increasing your score. It differs for everyone, but many consumers report gaining anywhere from five to 100 points over time. Most consumers notice an initial jump after a little more than a week.

What about reporting requirements?

Depending on the rent reporting service you choose, minimum approval requirements will include proof of identity, a signed lease agreement, and landlord verification. In some cases, you can automatically track and report rent payments by linking directly to your bank account.

Now for the question that's probably weighing most on your mind: where do you apply?

7 New Rent Reporting Services

A simple Google search will surface a wide selection of third-party rent reporting services. However, each differs in which credit bureaus they report to and what they report, so you'll need to weigh your options. Before signing up, check with your landlord in case they already report your rent payments.

If they don't, our list of the best rent reporting services available today offers a good starting point for your search. At a glance, the following table shows how they stack up against each other.

Service One-Time Setup  Past Payment Reporting Fee (Optional)  Recurring Fee Credit Bureaus Avg. Credit Boost
Boom Pay $10 $25 for up to 24 months $2/month TransUnion, Equifax, Experian 5 to 100 points
Rental Kharma $50 $0 for 6 months or $60 for up to 24 months $8.95/month TransUnion, Equifax 40 points
LevelCredit $0 $49.95 for up to 24 months $6.95/month TransUnion, Equifax 50 points in 2 years
Credit My Rent $0 $99 for up to 12 months or $149 for up to 24 months $9.95/month TransUnion, Equifax 10 to 40 points
Credit Rent Boost $25 $90 for up to 12 months or $105 for up to 24 months $2.50–$5.95/ month depending on package TransUnion, Equifax 30 to 100 points
Rent Reporters $94.95 Cost for up to 24 months included in the setup fee. $9.99/month or

$95.40/year

TransUnion, Equifax 35 to 50 points
Rock the Score $48 $65 $6.95/month TransUnion, Equifax 30 to 50 points

Here's a brief overview of each one and why you should consider it.

1. Boom Pay

Founded in 2020, Boom Pay has quickly become one of the most popular rent reporting services around. Besides charging less than competitors and including up to 24 months of historical reporting data if you opt-in, Boom Pay is the only service that currently reports to all three credit bureaus.

The service also doesn't require anything from your landlord. Instead, verification of rent payments is electronically done directly through your bank account. It's 100% secure, and you can expect to see an uptick in your credit scores about ten days after submitting your data.

2. Rental Kharma

More flexible than other services, Rental Kharma lets you customize your account setup in a variety of different ways. For example, you can add a spouse or roommate for just $25 so that their credit score grows, too. If you choose to add past payments, the fee covers you both—there's no extra charge.

Rental Kharma also offers a 90-day satisfaction guarantee and will refund your money if your landlord doesn't cooperate. Overall, the service's pricing structure is middle-of-the-road compared to competitors but worth it if you want a more tailored option.

3. LevelCredit

With no sign-up fee, you can get started with LevelCredit at a minimal monthly cost. You can also add up to 24 months of payment history to your account for slightly less than some alternative services charge.

Besides rent reporting, LevelCredit offers more value by letting you report utility and cell phone payments. This effectively creates multiple positive tradelines on your credit report and boosts your score even further.

Like Boom Pay, LevelCredit can monitor and automatically report payments to credit bureaus by securely connecting directly to your bank account.

4. Credit My Rent

Perfect for both new credit consumers looking to build their score and bad credit applicants who want to repair their score quickly, Credit My Rent offers an easy solution. Although their reporting fee for past payments is on the high side, their monthly fee is still manageable.

After creating your account and entering all relevant leasing information, Credit My Rent will work directly with your landlord and handle all reporting for you. One feature users like most about this service is Credit My Rent's intuitive online customer portal where you can view your rental payment history at any time.

5. Credit Rent Boost

Even though they boast one of the highest average credit increases, Credit Rent Boost surprisingly charges one of the lowest monthly fees. They also have phenomenal reviews online and an A+ rating with the Better Business Bureau.

As with Rental Kharma, you can add a roommate or spouse to your plan for a discounted fee so that they can also benefit from a credit boost. For $100 more, you can access Credit Rent Boost's expedited service. This guarantees reporting of your new account to credit bureaus within three business days of them receiving your information.

6. Rent Reporters

We're being sneaky here because Rent Reporters technically isn't a new service. They've been in business since 2012, but they're one of the top rent reporting services available today, with an outstanding reputation for great customer service and results.

Although Rent Reporters states their average credit boost is 35-50 points, many users claim they've gained more than 100 points in total. For consumers, the signup fee will seem steep. However, it includes two years of historical reporting data, which puts it on par with what competitors are charging for their past payment reporting services.

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7. Rock the Score

Besides being relatively affordable, Rock the Score offers several benefits. Users with lower credit scores tend to see a massive boost, with many claiming that they've gone from almost no score to a credit score of over 700 points. The service also lets you add a spouse or roommate at a discounted price. Whenever a second person can claim credit for the same on-time payment, as is the case here, it effectively doubles the value of the service.

Even though Rock the Score needs to verify payment details with your landlord, they don't require your landlord to be enrolled. They also offer a money-back guarantee, so you're protected if your landlord refuses to provide your lease agreement or payment information.

More like this: Why Is Account Services Calling Me? What Should I Do?

Final Thoughts

Though results aren't guaranteed, you may need to get your landlord verified, and late rent payments will reflect negatively on your credit report, the pros of rent reporting services far outweigh the cons.

Besides not having to qualify for the service like many other credit-building strategies require, rent reporting is cheaper than the majority of other methods. You can also use it to diversify your credit portfolio and beef up your file if you have a short credit history. Last but not least, most services allow for the reporting of past payments to aid in establishing your credit history faster.

Overall, self-reporting on-time rent payments is one of the easiest ways for you as a responsible renter to build a strong credit profile and prove your reliability to lenders. It's a low-risk option, and you can leverage this method no matter the state of your current financial situation. Simply sign up and start building credit today.

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