If you’re looking for ways to build your credit score, we have some great news: Paying rent online can do just that! In 2017, TransUnion studied 12,000 renters who reported their rent payments to credit bureaus over the period of a year. The study found that within six months, the credit scores of the renters improved by 16 points on average. The renters who saw the biggest improvements had beginning credit scores of below 620.
If you’d like to see a similar increase to your credit score, try paying your rent online. Doing so makes sure your rent payments are reported, gives credit bureaus valuable information, and can combine with credit card payments for more score gains. Read on for more information.
Makes Sure Your Rent Payments are Reported
“Simply paying your rent will not help you build credit,” says Bev O’Shea at NerdWallet. “But reporting your rent payments can help you build credit–especially if you are new to credit or do not have a lot of experience using it.”
So how can you be sure that your payments are reported to the credit bureaus? At Uptown Fullerton, we utilize an online rental payment system that does just that! From us, the credit bureaus receive a record of your on-time rental payments, which contribute to your good credit. In order to opt in for the credit reporting, follow these steps:
- Log in to your account through the resident portal and click on “Make a Payment Now.”
- Select “Build your credit history by opting in to credit reporting.”
- Enter your information in the credit reporting fields. Be sure to select “yes” for month-to-month lease if you have one, or select “no” and a lease end date.
Gives Credit Bureaus Valuable Information
What actually goes into a credit score, and does paying rent online contribute? Experian, for example, determines credit scores through the following elements:
- Use of credit cards
- Payment history
- Applications for new loans and credit
When you choose to pay rent online, those payments become part of your payment history. As you pay on time and in full each month, that valuable information becomes part of your score, too.
Combines with Credit Card Payments for More Score Gains
To add even more gains to your score, consider using a credit card every time you pay your rent online. “Open a credit card and use it to pay your rent . . . then pay your credit card balance in full each month,” says LaToya Irby, credit expert for The Balance. “The timely credit card payments will help boost your credit score.” You don’t have to pay your rent online with a credit card, but it can be a nice little boost to your credit score in conjunction with the benefits of paying your rent online.
Give your credit score a boost by paying your rent online through the resident portal. As you do so, you’ll make sure your rent payments are reported, giving them the valuable information they need. Plus, if you choose to pay rent with a credit card, you may see additional gains to your score! Happy credit-score-boosting!