Looking for a fast way to build credit? We have some great news: Paying rent online can do just that! In a 2017 study by TransUnion, researchers followed 12,000 renters who reported their rent payments to credit bureaus over the course of a year. On average, participants saw a 16-point increase to their credit scores within six months, and those who had the greatest increases had an initial score below 620.
If you’d like to see a similar boost to your credit score, go ahead and pay your rent online. Doing so allows your rent payments to be reported, shows credit bureaus valuable information, and can combine with credit card payments for even higher gains. Here’s how.
Shows Credit Bureaus Valuable Information
While your credit score is important when it comes to applying for loans, credit cards, or even jobs, your score can depend on who you ask. However, the major credit bureaus look at similar information when calculating your score. Experian, for example, determines credit scores through the following elements:
- Use of credit cards
- Payment history
- Applications for new loans and credit
When you pay rent online, the payments become part of your payment history. And as you pay on-time and in-full each and every month, that positively impacts your score as well!
Allows Your Rent Payments to Be Reported
“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.”
So how do you ensure your rent payments are being reported? At The Jackson Apartment Homes, our rental payment system reports this information to the credit bureaus. This way, the credit bureaus receive a record of your on-time rental payments, which contributes to your good credit. In order to opt in for the credit reporting, follow these steps:
- Log in to your account through the resident portal and click on “Make a Payment Now.”
- Select “Build your credit history by opting in to credit reporting.”
- Enter your information in the credit reporting fields. Be sure to select “yes” for month-to-month lease if you have one, or select “no” and a lease end date.
Combines with Credit Card Payments for Even Higher Gains
To boost your score even more, consider using a credit card to pay your rent. As LaToya Irby, credit expert for The Balance, advises, “Open a credit card and use it to pay your rent . . . then pay your credit card balance in full each month. 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.
So, give it a try! Pay your rent online through the resident portal. As you do so, it allows your rent payments to be reported, showing the credit bureaus the valuable information that they need. Plus, if you’re paying rent online with a credit card, your score could climb even higher! Happy credit-score-boosting!