Rental Payments Affecting Credit Scoring

Rental Payments Affecting Credit Scoring

Summer Rental (Photo credit: Wikipedia)

Rental Payments Affecting Credit Scoring

Rental payments affecting credit scoring could be great news for those with thin credit files who pay their rent on time.  Let’s not get get too excited about the possibilities for increasing our credit scores until we examine the facts. if rental payments affecting credit scoring is the trend of the future let’s take a hard look at the reality.  Many landlords will not want to be bothered with the extra paperwork and fees involved to qualify. Is this happening right now?  Do I have to do anything first?  How much difference will it make to my FICO score?

FICO Scoring Not Affected by Rental Reporting

Let’s get the bad news out of the way right now…that is if it’s bad news at all. The FICO scoring model is not factoring in rental payments at all at this point in time.  If FICO has plans to ever factor in rental payments they have not announced these plans.  The upstart Vantage credit scoring model will factor it in.  Vantage is used by less than 10 percent of lenders so this probably won’t help you.  The borrower does not get to pick and choose which credit reporting agency the lender relies on.

Of course a judgment for back rent can affect your credit score as much as any other judgment.

Are Rental Payments Affecting Credit Scores Right Now?

As of the present time Experian and TransUnion are allowing rental payment records to factor into their scoring models. Equifax does not accept rental data and has not announced any plans to do so in the foreseeable future.  For mortgages, lenders typically use a tri-merge credit report which factors in data from the 3 major credit reporting agencies.  For credit cards and most other forms of lending they just pull one report.  They don’t tell you which one.

If the owner decides to report your rental payments there is nothing else the renter has to do.  If they don’t, a renter can now self report.  One way to self report is through a company called  This service is free if via bank transfer. It costs 2.95 percent with a credit card.  Another company called charges $10.00 for the first 2 years and $10.00 per month to continue reporting.  Another company you may look into is

Rental Payments Affecting Credit Scoring Not an Unmixed Blessing

Lawyers frequently refer to an item of evidence that cuts both ways as a “two edged sword.”  Two edged swords help you or hurt you depending on how you look at it.  Rental payments affecting credit score is a blessing for a renter who is always on time or otherwise has a thin file.  It can be a huge blessing also in the very important “time in file” or average age of accounts section if the renter has a long time renting in the same location and has consistently paid on time.

The other edge of the sword cuts when the renter is late.  Even occasional late payments can cause serious damage to credit scores for a considerable length of time.

Rental Payments Affecting Credit Scoring Easily Gamed

The bane of the credit scoring system is opportunities for those in the know to “game” the system with false or misleading data.  Most anyone can “become a landlord” and collaborate with another to create a long and stellar credit history.  Who’s to say or prove whether or not the data is true?  I suspect that this is the main reason why FICO and Equifax are not buying into this new trend.  Not that they tell us everything.  Some things are proprietary secrets…their own “secret sauce.”

The Devil is in the Details.  I’m sure Rental Payments Affecting Credit Scoring will evolve with time and experience.  I’ll stay tuned.
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After practicing law for 37 years Edward F. St. Onge, Sr. now devotes all his time to helping consumers achieve a high credit score with amazing speed. Learn the counter-intuitive secrets to credit scoring through his down to earth instructions backed by extensive knowledge of the laws and trends. All of the latest tricks and techniques that they don't want you to know now at your disposal. At last a level playing field for the consumer!

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