Want to boost your credit score? Next time you go to make a rent payment, do it online! In 2017, TransUnion studied 12,000 renters who reported their rent payments to credit bureaus over the course of a year. The results? Renters’ scores rose an average of 16 points within six months, and the benefit was greatest for those who started with the lowest scores.
Make an online rent payment each month and see what happens with your credit score! Paying online ensures your payments are reported, shows credit bureaus what they are looking for, and can combine with credit card payments to increase your score even more. Here’s how.
Ensures Your Payments Are Reported
Paying rent online is the key.
“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 Sol, we offer an online rental payment system that reports information to the credit bureaus. That way, they know that you make an on-time rental payment each month, and that contributes to your good credit.
Makes You Look Good
To understand how online rental payments make you look good, it helps to understand what goes into a credit score. Experian, for example, calculates credit scores through the following elements:
- Use of credit cards
- Payment history
- Applications for new loans and credit
So, when you make an online rent payment, 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
For another added boost to your score, you might try getting a credit card that you only use to pay 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.”
It’s just one extra step to add to your rent payment each month, but when you pay off that bill, it pays off for you!
Improve your credit score by paying rent through the resident portal. That way, your payments get reported to the credit bureaus, which makes you look good. Plus, if you choose to pay rent with a credit card, you may increase your score even more. Happy credit-score-boosting!