Can How You Pay Your Rent Effect Your Credit Score?

Mortgage and Lending with PrimeLending, A PlainsCapital Company 217388

Until recently rental payment history was not reported to the major credit bureaus and therefore wasn't included on your credit report. Because it was not included on the report, the payment history was not included in the credit score.

Experian, one of the 3 majors credit reporting companies, recently announced that it will be the first major credit reporting agency to include these payments in its credit reports.

To get the data Experian acquired RentBureau in 2010. RentBureau is the largest and most widely used credit bureau for the multifamily industry. A national network of 45 property companies – including large apartment owners and managers – collect data about rental payments and, in turn, automatically report that payment history to RentBureau every 24 hours.

Will this be good or bad for your credit score? Initially, only positive rental histories will be reported but it is expected that in 2012 they will start reporting negative credit histories. If you make your rental payments on time this should help you credit score and lower your borrowing costs.

Will the other credit agency's Equifax and TansUnion start using rental data? It's uncertain at this time but if one uses the data I'm sure the other 2 bureaus won't be far behind.

A number of articles about this change have been written recently. For more information you can see the articles in the Baltimore Sun, or AOLOriginal.

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Alan Gross
Senior Mortgage Consultant

PrimeLending, A PlainsCapital Company
704 Quince Orchard Rd., Suite 230
Gaithersburg, MD 20878
Home Office: 240.813.0614

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Team Honeycutt
Allen Tate - Concord, NC

Interesting information on rental history and the way it affects credit reports.  You have excellent expertise on this subject. Thanks for sharing.



Feb 04, 2011 04:40 PM #1
Victor Zuniga
Berkshire Hathaway Home Services California Properties - San Diego, CA

This is great news for long time renters that who would now like to buy a home.

Feb 04, 2011 04:46 PM #2
Alan Gross
PrimeLending, A PlainsCapital Company - Bethesda, MD
Loan Consultant

The landscape is changing. Hopefully this will help renters who are trying to become first time homebuyers.

Feb 05, 2011 09:54 AM #3
Jim Keilson
Maryland Home Inspection Services, Inc. - Gaithersburg, MD

I am with all of you.  This is a good thing for all the good paying renters that now are redy to make the jump into a home.

Feb 07, 2011 04:11 PM #4
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Alan Gross

Loan Consultant

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