The next time you pay rent, work on improving your credit score at the same time to kill two birds with one stone! Are you wondering how paying rent online improves credit? Read on to have all your questions answered:
In 2017, TransUnion studied 12,000 renters who were reporting their rent payments to the credit bureaus. On average, their scores improved by 16 points within six months! And those who had beginning scores of lower than 620 saw the biggest increases!
To see a similar increase in your credit score, try paying your rent online. Doing so 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.
Adds Your Payments to Your Credit Report
“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 get your rent payments reported? At Sundial Apartment Homes, our online rental payment system takes care of it for you. Simply pay through the portal, and the credit bureaus will receive a record of your on-time rental payments, which will bolster your score. 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.
Shows Credit Bureaus Relevant Information
What actually goes into a credit score, and does paying rent online truly improve your score? Experian, for example, determines credit scores through the following elements:
- Use of credit cards
- Payment history
- Applications for new loans and credit
By paying rent online, this builds out your payment history. Your continued on-time and in-full payments will contribute to a higher score as well.
Use with Credit Cards to Gain More
To work on improving your credit score even more, pay your rent online with a credit card.
“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 certainly don’t need to pay rent online with a credit card, but it can give your score an additional boost.
Go ahead and give it a try: Pay 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!