A Need to Know: A New Way to boost Your Credit Score: On-time Rent Payments?
Is it possible to boost your Credit Score by making On-time Rent Payment? Experian says Yes!
I. We need to know what Experian has done to help the consumer:
1. During these economical challenges, it appears Experian is the first to come forward to help the consumer boost their credit score by incorporating positive rent payment within the Experian credit report.
2. Clearly, Experian allows consumers to establish or rebuild credit through timely rent payment.
3. This includes homeowners now renting after a foreclosure or a short sale, as well as non-credit active and cash based consumers. Bottom line: Experian has started to include on-time rent payment history in its credit reports.
4. Brannan Johnston, Vice President and Managing Director of Experian Rent Bureau say “Individuals can build and rebuild their credit by paying rent responsibly”. Johnston stated adding 45% of consumers who don’t have a credit score or fall in the lowest VantageScore level can up their score at least 100 points. Experian Rent Bureau collects updated rental histories from property management companies.
5. Specifically, Property managers can upload positive rental data, which means payment information for individuals meeting their lease obligation in the last 24 months. That information is then factored into the VantageScore credit score used by Experian.
For the Record: There are 3 Credit Reporting bureaus:
1. Experian: 888-397-3742: http://www.experian.com/
2. Equifax: 800-685-1111: http://www.equifax.com/home/en_us
3. TransUnion: 800-916-8800: http://www.transunion.com/
II. Questions? What are the other 2 credit reporting agencies doing to help boost consumer’s credit scores? What advise do they have for consumers?
1. Equifax offers some illustrations of the Dos and Don’ts of creditworthy behavior; but no mentioning of: On time Rent payment Factored into credit report to boost credit score.
Do’s
· Pay your bills on time. Delinquent payments and collections can have a significant negative impact on your score.
· If you have missed payments, get current and stay current.
· Pay off debt rather than shifting it to other accounts.
· Re-establish your credit history if you have had problems. Opening new accounts responsibly and paying them off on time may help in the long term.
· Apply for and open new credit accounts only as needed.
· Keep credit cards but manage them responsibly. In general, having credit cards and installment loans (and paying timely payments) may favorably impact your credit score in the long term. If you are having trouble making ends meet, contact your creditors or see a legitimate credit counselor.
· Keep balances low on credit cards and other revolving credit.
· Shop for rates for a given loan within a short period of time. The Equifax Risk Score distinguishes between a search for a single loan and a search for many new credit lines, partly by the length of time over which inquiries occur.
Don’t
· Close unused credit cards as a short-term strategy to try to raise your score.
· Open a number of new credit cards, just to increase your available credit. This approach could actually have a negative impact on your score.
· If you have been managing credit for a short time, avoid opening a lot of new accounts too rapidly.
· Adding new accounts will lower your average account age, which could have a negative impact on credit score.
III. TransUnion give tips for healthy credit, but no mentioning of On-time Rent Payments to boost credit score.
· Be a better credit manager. It takes time, discipline and a little knowledge about credit scoring system.
· Don’t be late: Late payment collection notices, and bankruptcies have the greatest negative effect on your credit.
· Credit standards are tighter than they used to be. A low credit score today does not mean you can’t work toward better credit health. Let the low credit score be the starting point for your journey toward a more robust score.
· Don’t let the damage spread further: If your finances are in trouble due to a job loss or other factors, and it’s affecting your ability to pay your bills on time, you need to address this.
· If you can’t pay your bills, explain why to the credit issuers and try to negotiate lower payments terms or additional time to pay.
· Find out how they will report it to the credit reporting companies and get that in writing.
IV. A Reminder: The Credit Reporting Agencies’ Job
1. Access your payment information directly from the companies you have credit with, as well as from government agencies such as the legal court system. They use this historical information to create your credit report. This detailed consumer report tells everything about you, including where you work and live, timeliness of your bill payments on time and whether you've ever been arrested, sued or filed for bankruptcy
V. A Need to Know: How credit rating is determined
· Credit bureaus use this information in your credit report to determine your credit rating on the day it’s requested.
· Your credit score is important because most lenders will use it to automatically judge if you’re a good credit risk. Credit scores, also known as FICO scores, generally range from 350 to 850.
· Most lenders will work with you if your score is at least 620.
· If your rating is 720 or higher, they’ll consider you the most trustworthy type of borrower and offer you their best (lowest) rate.
Your Feedback is appreciated
Source: www.WSJ.com: Emily Glazer, January, 2012
www.experian.com
www.equifax.com
www.transUnion.com
MC Griffin Campbell, Broker/Owner: License #: 01819507
Short Sales and Foreclosure Resource (SFR) Certification
Seniors Real Estate Specialist Designation (SRES); MFT, M.Div.
323-382-4364: 323-464-5431
www.hollywoodhomesbymcampbell.com
email: hollywoodhomesmc@aol.com
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