One of the most frustrating things about renting while trying to build a good credit history is that, in most cases, paying your rent on time every month doesn't have any impact on your credit. This can be maddening for those who have a spotless rental payment history but have difficulty getting approved for a home loan or even simple credit cards.
Levelcredit is a rental reporting service whose goal is to turn a positive rental payment history into usable credit report items. This allows people stuck in the frustrating cycle of credit damage and being forced to rent a way to improve their credit easily.
Is the Levelcredit service worth it? Are they really able to offer an improvement to credit ratings based on good rental payment history? And how much is that really worth in the end? We're going to take a good look at Levelcredit, who they are, what they do, and how it may be able to help you and your credit rating.
What Is Levelcredit?
Levelcredit and other similar platforms are making a space for themselves in the consumer credit and finance space by making it easier for people who are renting to have monthly payments reported to the major credit bureaus. In most cases, traditional models for credit scoring have not been designed to factor rental payments into their data and scoring.
This can be a tremendous hindrance for those renting but trying to build up a solid, good credit history or repair a previously damaged credit history. While rental units will almost always require a credit check in order to approve a lease, they almost never report rental payments to the credit authorities. This means that on-time payments keeping a roof over your head, just like a homeowner, are doing nothing for your payment history, unlike the homeowner who gets a consistent monthly payment history for their mortgage.
Levelcredit is a service that is touted to help you "build credit without taking on debt" by reporting payments you are already making, such as rent and some utilities. There have been similar companies that offered rental payment reporting, but they were often only available to rental property managers who chose to work with them.
Levelcredit is created as an accessible and functional way that the average consumer can use RentTrack to get monthly reports to the primary credit bureaus. There is a monthly fee, and while subscribed, Levelcredit will monitor a financial account linked for that purpose and report any rent payments it identifies to Equifax and TransUnion. There is even the ability to report utility bill payments, but only to one of the three bureaus, TransUnion.
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Is Levelcredit Right For You?
Levelcredit provides a crucial service for consumers who have a damaged credit history or credit that otherwise needs to be built up. If you are in need of help establishing your credit, then Levelcredit may be able to help you use your rental payments for that. If you're already enjoying an excellent credit score, then the expense of Levelcredit probably won't make it cost-effective for you.
If you pay your rent with debits from a bank account or an ACH transfer, or by using apps like Zelle, Venmo, and PayPal, then using Levelcredit could be great for you. They may still be able to help report your payments if you pay via an online payment site or payment portal or if you pay via direct deposit.
Since Levelcredit will need to monitor your bank account or payment account for the payments, you will need to grant them the ability to do so. For people with privacy concerns surrounding their banking and who are not comfortable giving the company monitor access to the account, Levelcredit won't be a good match since that will prevent them from functioning or providing any benefit at all to the renter.
If you have any current credit cards or installment loans in good standing, then Levelcredit probably won't offer you much benefit. Those financial products will have already contributed to a solid payment history for you, and if the accounts are still in good standing, then it is likely that there isn't much room for improvement.
If the payment histories on those accounts are damaged or otherwise lacking, consider working with Levelcredit to help improve the overall payment history may prove beneficial. In situations where you're trying to combat negative information with positive credit information the potential to improve the person's credit score often isn't as big as they feel it is, and improvements will usually be modest and slow to happen.
Will You Benefit From Rent Reporting?
In nearly all cases, even a small increase can be worth 6-12 months of subscription fees, particularly if it moves you from the "fair" credit to the "good" credit category for example. But before you take any action, evaluate the cost and what that cost will mean to you and your other financial obligations.
If you can get a secured credit card or a credit-builder loan for the same cost, the overall credit benefit may be greater by going with one of those products. However, if you can get a reasonable increase in your credit score by committing only a portion of that same potential sum, it may be a much better return on investment for you.
Levelcredit rental and utility payment reporting may also be of vital importance to you if you simply cannot get a secured credit card or credit-builder loan at this time. If you are just starting out trying to build or rebuild your credit history, you may not even qualify for options like cards or loans, which can leave you with a shocking lack of options. Luckily Levelcredit does seem to do a good job filling the gaps in a reporting industry that often leaves renters behind.
Levelcredit does have some additional benefits that you may enjoy, but if you're already checking your credit report or using any other credit monitoring sites or apps, the features will likely feel a bit redundant. Levelcredit offers users the ability to access FICO estimated credit scores, as well as access to credit report information and customized tips on how to improve credit based on that information.
What About Reporting My Rent Payments To Experian?
Levelcredit only reports rental payments to two of the three main credit reporting bureaus. Since all three are commonly used in deliberations for a credit card, a loan, or mortgage applications, people commonly wonder if there is a way to get rental payments reported to Experian.
Experian requires the use of its own proprietary tool, Boost, to get rental payments and utility bills reported for credit reasons. This means that while you cannot use Levelcredit to get your rent reported to all three bureaus, there is a workaround that just needs a little extra effort on the part of the person paying the rent. The Boost feature is free, and it will help add your rent payments and utilities into your FICO scoring.
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The reviews of Levelcredit at large are incredibly encouraging, with just about everyone in their target demographic stating that they saw benefits from it in only about a month. There are reports of people that have seen dramatic credit score jumps after having their rental payment reported for up to the prior 24 months.
There are some reports of users not getting the expected benefits from it. While this is possible, it seems like those users were likely contributing to other existing payment history or possibly trying to raise an already reasonably good credit score. In cases where the credit history is already substantial or in good shape otherwise, reporting rental payments will not be the best way to raise credit scores.
Not only do they offer an ongoing service that's less than $7 per month that will report monthly rent, but they offer catch-up services as well. These reporting options will report the renter's history going back a predetermined length of time. For about $50, users can have the previous 12 months of rental and utility payments reported, and for about $90, they can have the full 24 months prior reported to help get that score moving fast.
Spending money on rent month after month can be infuriating when you don't see anything in return; no ability to build equity even in your own payment history and creditworthiness can make the prospect of building your credit to feel overwhelming sometimes.
But if you fit the criteria for someone who may benefit from a rental reporting service like Levelcredit, then you should absolutely look into it. Be sure that the subscription fee isn't going to outweigh any potential benefit or put you under financial pressure, and if you can, you definitely should. You're already paying on time or you wouldn't have a place to live; you might as well get credit report benefits from it as well.
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Shawn Manaher is a former financial advisor, has founded 5 online businesses, and is a coach, speaker, podcast host, and author. He's been featured on Forbes, The Consults Corner on TAE Radio, The Writing Biz, What's Your Story, and more.