If you want to improve your credit score, then we have some great news: Paying rent online can do just that! In 2017, TransUnion studied 12,000 renters who reported their rent payments to credit bureaus over the course of a year. The study found that renters’ scores rose an average of 16 points within six months, and the benefit was greatest for those who started with a credit score below 620.
To grow your credit score, build credit by paying your rent online. This helps you be sure your payments get reported, provides credit bureaus with the key markers of good credit, and can partner with your credit card payments to further grow your score. Here’s how.
Be Sure Rental Payments Get Reported
“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, what can you do to be certain that your monthly rent payments are reported and helping you build credit? At Sherwood Apartment Homes, we offer an online rental payment system that reports information to the credit bureaus. That way, credit bureaus receive a record of your on-time rental payments, which contributes to your good 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 â€œMake a Payment Now.â€
- Select â€œBuild your credit history by opting in to credit reporting.â€
- Enter your information in the credit reporting fields. Be sure to select â€œyesâ€ for month-to-month lease if you have one, or select â€œnoâ€ and a lease end date.
Provides Credit Bureaus with the Key Markers of Good Credit
What actually goes into a credit score, and does paying rent online contribute? 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 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.
Can Partner with Your Credit Card Payments to Further Grow Your Score
If you want to grow your score even faster, then it might be worth looking into using a credit card to make your rent payments.
“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.”
It’s not necessary to pay your rent with a credit card, but it could help provide an added lift to your credit score in addition to the pros of paying your rent online.
Jumpstart your credit score by using the resident portal to pay your rent online. As you do so, your payments are 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. Happy credit-score-boosting!