If you’ve been looking into ways to improve your credit score, you might have come across the idea of paying rent online. You may have wondered, “Can something as simple as paying rent online actually improve my credit score?” We have some great news: It really can! 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. The benefit was greatest for those who started with a credit score below 620, which is considered bad credit.
Try paying your rent online to see a similar increase in your credit score, too. How does this work? Well, paying rent 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
According to Bev O’Shea, all three major credit bureaus will include rent payment information in credit reports, and while simply paying rent will not help with building credit, reporting on those payments will. This is especially true if you are new to credit or inexperienced with it.
So, how can you make sure your rent payments are reported? At Pointe Pacific Apartment Homes, we have an online rental payment system that makes reporting information to credit bureaus easy. Through our system, credit bureaus receive a record of your on-time rental payments, allowing you to contribute to your good credit.
Combines with Credit Card Payments for Higher Score Gains
To improve your score even more, using a credit card specifically while paying rent may be worth considering. “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.”
You don’t have to pay your rent with a credit card, but it can be a nice little boost to your credit score in combination with the benefits of paying your rent online.
Shows Credit Bureaus What They Are Looking For
What actually goes into a credit score? There are a few things that influence how high your credit score is. Experian, for example, determines credit scores through the following elements:
- Payment history
- Use of credit cards
- Applications for new loans and credit
Still wondering how this improves your credit score? Well, when you pay rent online, those payments become part of your payment history. Then, as you continue to pay on time and in full, that becomes part of your score, too.
Give your credit score a boost by paying your rent online through the resident portal. 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!