We could all do with better credit, especially if we find ourselves with a credit score lower than 601. Fortunately, if you’re already in the habit of paying your rent on time, you can easily improve your credit by paying rent online. According to a 2017 study by TransUnion, renters who included their rent payments to credit bureaus saw an average credit score increase of 16 points within six months. Those with a credit score below 620 saw the greatest benefit.
Paying rent online is a small action with potentially huge results. Let’s talk about what credit bureaus are looking for, how you can get them the information they need, and your secret weapon for even better credit.
What Are Credit Bureaus Looking For?
It helps to understand how credit bureaus determine your credit score. Experian explains it like so: “Credit scores are calculated using data in your credit reports, which are updated continually with new information related to your credit activity, including your use of credit cards, payment of loans and credit card accounts as well as any applications for new loans and credit. Credit scores taken a few days apart, and possibly even hours apart, can differ due to updated information such as a missed loan payment.”
In summary, the most important information is (1) your payment history and (2) your use of credit cards. As we’ll see, paying rent online can be a double whammy as far as your credit score is concerned.
Credit Bureaus Know When Youâ€™re Paying Rent Online
Before you go out and start racking up online purchases, know that just buying things isn’t enough to build a payment history. “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.”
At Villa Del Sur, we take care of the reporting for you. When you use our online rental payment system, your payment is reported to the credit bureaus directly. When those payments are on time, the credit bureaus know about that as well, helping your credit even more. 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.
Using a Credit Card Helps Even More
Like we said before, credit bureaus want to see how you use credit cards. The best option for you? Use a credit card specifically for rent. “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.”
Ready to improve your credit score? Start paying rent online and watch how it helps your credit rise. With our resident portal, paying rent online is quick and easy. With credit bureaus looking for a good payment/credit card history, paying rent online is just the fix you need.