Are you looking for ways to build your credit score? Here’s an easy way to do just that: pay your rent online!
A 2017 study conducted by TransUnion followed 12,000 renters. For a year, the renters reported their rent payments to the credit bureaus, and their credit scores were tracked. On average, the renters saw a 16 point increase within six months from doing this! For those who had scores lower than 620, their point increases were the most significant.
If you’d like to see similar results, pay your rent online! Doing this adds your rent payments to your report, offers credit bureaus information they are looking for, and can be used with credit card payments to gain a higher score. Here’s how.
Adds Your Rent Payments to Your Report
“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 rent payments are reported to the credit bureaus? At The 5800 Apartment Homes, our system takes care of all the reporting for you. Credit bureaus will receive a record of your on-time rent payments, thus bolstering your 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.
Offers Credit Bureaus Information They Are Looking For
What actually goes into a credit score, and does paying rent online contribute? In general, the bureaus look for the same information. Experian, for example, determines credit scores through the following elements:
- Use of credit cards
- Payment history
- Applications for new loans and credit
When you pay your rent online, those payments become part of your payment history. As you pay on time and in full monthly, that becomes part of your score, too.
Use with Credit Card Payments to Gain a Higher Score
To strengthen your score even more, make your rent payments with a credit card. “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 with a credit card, but it can positively affect your credit score in combination 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, it adds your rent payments to your report, offering credit bureaus information they are looking for. Plus, if you pay rent with a credit card, you can potentially gain an even higher score. Happy credit-score-boosting!