It’s a conundrum that a lot of renters face: you pay your bills on time every month. But, the monthly payments don’t count toward your credit score, meaning that you are less likely to qualify for a home loan.
A new company called RentTrack is partnering with Experian and TransUnion to change that. Users of the service can pay their rent online through the RentTrack site. The credit bureaus will, at the renter’s request, add the payment history to the renter’s credit report. This should create a large credit score boost for renters.
Why Credit Bureaus Are Getting Involved
First-time homebuyers make up a smaller portion of home purchasers than ever before. The reason is that many don’t have high enough credit scores to get approved for a mortgage. But, adding a consistent payment history to a renter’s application can make all the difference when it comes to approval of funds to finance a house. TransUnion performed a study showing the effects of rental data on a credit report. One-fifth of renters saw their scores increase by 10 points or more in the first month. Another two-thirds saw either no effect or at least a small increase.
How It Works
Renters can visit RentTrack’s site to see whether their landlords are already enrolled in the program. If a property owner is not signed up yet, an invitation will be sent. Then, the renter makes payments through the site using an e-check or a credit or debit card. You can even sign up for automated payments if you have trouble remembering when to pay the bill.
The site can be a boon to those undergoing credit repair, since it rewards you for doing what you will be doing anyway. Talk to us about the things that you can do to take control of your finances and improve your credit score.
For additional information on how to repair your credit, please contact our office at 617-265-7900 or request a free consultation below.