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myFICO: How to Add Rent Payments to Your Credit ReportsSince 2014, FICO has included reported rental data in all new versions (FICO Score 9 and FICO Score 10) of its scoring models, meaning that paying rent on time could help improve your FICO® Score. But many landlords do not send their tenant's rental information to the credit bureaus. Fortunately, it's becoming easier and more common to do so, and here's how you can do it, from myFICO. For more loan and credit education, visit myFICO's blog at https://www.myfico.com/credit-education/blog Why Don't Landlords Report Rent to the Credit Bureaus? Like creditors, landlords aren't legally required to report their tenants' monthly rent payments to the three major credit reporting agencies, and for the landlords, the process often requires additional costs and effort. Also, while a rent payment is similar to a mortgage payment in terms of your budget, you're not technically borrowing money, so it's been a relatively recent addition to credit reports. However, the motivation for landlords to report is becoming more clear. Not only does rent reporting potentially help landlords screen tenants based on their rental history, but it can also encourage tenants to pay on time to avoid negative marks on their credit reports. How to Get Credit for On-Time Rent Payments If you pay your rent on time, here are a few different ways you can have that information be considered in your FICO® Scores. Talk to Your Landlord As options for reporting rent payments improve, 27% of property managers who are aware of the practice do so, according to a recent report from TransUnion. So, before you consider other methods, reach out to your landlord and ask about their reporting policy. If they were unaware of the option or have considered it, you may be able to share how the practice could benefit their business by incentivizing on-time payments and potentially even giving them an advantage over oher landlords in the area who don't offer reporting. Before talking to your landlord, you can also review your credit reports to confirm whether or not they're reporting your monthly rent payments. Research reporting services There are several different reporting services that can help you get your rent payments added to your credit reports. Many charge a fee, so evaluate carefully:
Depending on your situation, consider each of these options to determine which one is best for you. You may also consider using multiple services to get all three bureaus while minimizing your costs. How will adding rent payments to my credit report affect my FICO® Score? First and foremost, a record of on-time rental payments is more likely to have a positive impact on your FICO® Score than a record that includes late or missed rental payments. Secondly, if you have limited credit history or you are rebuilding your credit, the inclusion of a record of on-time rental payments in your credit file may have a larger positive impact on your score. A 2020 study showed that "including rental history in credit reports could increase the proportions of tenant with scoreable credit histories and with good credit scores, but the change could be detrimental to credit scores for a subset of tenants." It's also important to remember that reported rental payments are only considered in newer FICO® Scores, so rental payments won't impact the FICO Scores currently used for mortgage (FICO Scores 5, 4, and 2). Before you start reporting your rental history to the credit bureaus, it's important to know that your landlord might report past payments as well as your future payments, so you should consider if you have had any late or missed rental payments that could hurt your score. You should also consider how confident you are in your ability to make on-time payments in the future. After you report your rental history to the credit bureaus, be sure to review your credit reports to confirm that your newly reported rental history is accurate. The Bottom Line Many entities think people should get credit for making on-time rent payments just as homeowners get credit for mortgage payments. If your landlord doesn't already offer reporting or doesn't plan to, there are ways you can get your payments reported on your own. Take your time to research and compare multiple options before you make a decision to ensure that you get the best value for your money. About myFICO myFICO makes it easy to understand your credit with FICO® Scores, credit reports and alerts from all 3 bureaus. myFICO is the consumer division of FICO- get your FICO Scores from the people that make the FICO Scores. For more information, visit https://www.myfico.com/credit-education.
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