A 2017 TransUnion study followed renters to see what happened to their credit scores when the renters reported their rent payments to credit bureaus. You know what happened? Their credit scores improved by an average of 16 points within six months!
If you’re hoping to improve your credit score, it’s more than worth it to pay rent online. Doing so makes sure your payments can be reported, makes you look good, and gives you an opportunity to boost your score even more. Keep reading to learn how it works.
Ensures Your Payments Are Reported
Did you know that, at Villa Del Sur, we offer an online rental payment system that reports information to the credit bureaus? Yep! Our renters who pay online have a record of their on-time rental payments sent to the credit bureaus.
“Simply paying your rent will not help you build credit,” as Bev O’Shea at NerdWallet explains. “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.”
Shows Credit Bureaus What They Are Looking For
What exactly are the credit bureaus looking for? Experian, for one example, determines credit scores through the following elements:
- Payment history
- Use of credit cards
- Applications for new loans and credit
When you pay rent online, those payments become part of your payment history. As you pay on time and in full and continue to do so, that becomes part of your score, too.
Combines with Credit Card Payments for Higher Score Gains
Here’s a tip to consider: “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.” Of course, you don’t need to pay your rent with a credit card as opposed to a debit card, but it can improve your credit score in combination with the benefits of paying your rent online.
Improve your credit score by paying your rent online through the resident portal. This allows your payments to be reported to credit bureaus, showing them exactly what they are looking for. Plus, if you choose to pay rent with a credit card, you may increase your score even more. Give it a try!