Looking to maintain your good credit or increase your credit score to “good” or “excellent?”
If you’re a tenant, don’t assume that your rent payments can’t help you with your credit score because they can!
Times have changed. According to Census data, in the first quarter of 2020, 34.7% of homes were rented. This number was up from 30.8 in 2004 but down from its post-recession peak of 37.1 in 2016.
If you’re part of the 1/3 of America that’s renting, then you must use your on-time rent payments as a means to increase your credit score.
If you’re a landlord, there are benefits for you to report rental payments.
Whether you’re a tenant or landlord, reporting rent payments to the three credit bureaus is in everyone’s best interest.
Keep reading to learn why both landlords and tenants care about reporting rent payments and how to report them.
How can reporting rental payments to credit bureaus help landlords and tenants?
For tenants, making on-time rent payments and reporting them is very helpful for those trying to build their credit scores or those working to repair them after going through difficult times.
Also, having a credit score (calculated by one of the three credit bureaus) is only possible if you have a credit history. Making rent payments and reporting them can help build this history.
For landlords, while reporting on-time rent payments is enormous for your tenant, it also shows your tenant(s) that you care and are willing to support them in life by helping them increase their credit score(s).
Why help them in life? There are four reasons:
- Reporting on-time rent payments for your tenants can produce a positive relationship, which is positive for everyone.
- The more landlords that take advantage of reporting on-time rental payments, the better the chance of finding excellent tenants. Credit reports don’t usually show rental payments, but if they did, landlords would see the positive rental history of their applicants and be able to choose the ones who are the lowest risk.
- We know that full occupancy and low churn (reduced turnover) are top-of-mind for landlords and managers, so what better way to affect occupancy levels than have your tenants tell all their friends about their rental building?
- Besides motivating tenants to pay on time for their credit history, on-time payments also mean fewer late payments, which helps your cash flow.
Can You Report Your Rent Payment?
Yes, rent payments can be reported to credit bureaus, but, as a tenant, you can’t do this yourself. However, there are reporting services that will send information about your monthly payment to credit bureaus.
Many landlords use rent payment collection apps such as PayRent to track payments, collect on time, and protect themselves from late and lost rent. They also use these apps to report rent payments to the three credit bureaus, Experian, Equifax, and TransUnion.
How To Report Rent Payments
For landlords and tenants, the reporting of rent payments is the same—through an app.
A tenant can’t report their rent payment. There is no process for “everyday” Americans to report to credit bureaus, which means relying on others to do this for us.
Utility companies, credit companies, the government, and landlords can all report payments on time and late.
If you’re a landlord, you can sign up with a rent collection app like PayRent to make your work hassle-free, AND you can invite your tenants to sign up as well—quickly.
With PayRent, you can report your tenants’ on-time rental payments, have a financial safety net, smooth out cash flow and have greater peace of mind. What could be easier?
If you’re a tenant, you also can sign up for PayRent to reduce your stress every month when rent is due.
A Final Thought
Reporting rent payments to credit bureaus using a rental payment app is a win-win for landlords and tenants.
It can feel like a leap of faith to an app and even scary, but being able to report a rent payment, whether you’re a landlord or tenant, can make a significant difference in relationships, credit scores, public opinion, and lead to decreased stress.
If you haven’t already signed up for a rental app like PayRent, please don’t wait any longer.