Your credit score. That elusive number between 300 and 850 that seems to follow you around wherever you go, determining whether you can buy that new car, rent that apartment, and perhaps most distressing for many Americans – whether you can become a homeowner. For many mortgage lenders, the minimum credit score required to approve a home loan is 640, and until now, on-time rent payments have not been a factor in determining your score. For many long-time renters who have accumulated a perfect track record of on-time payments, that omission has been a lost opportunity to give their credit a boost.
But now, Experian and TransUnion, two of the major national credit scoring bureaus, have begun using rental payment data in their credit-scoring criteria in partnership with a website called RentTrack. The site aims to help renters build credit by allowing them to pay their rent online, and by allowing landlords to report their tenants’ payment records to the bureaus. According to this report, almost 20 percent of renters saw their credit scores increase by 10 points after just a month of their landlord reporting payments. While it costs $1.95 per month for renters to use the site to pay online, they can also use it to track their credit progress, and many landlords will cover the cost.
For someone who hasn’t had much opportunity to build credit, this is a great way to practice good habits by making sure your rent is paid on time while simultaneously raising your credit score and opening the door to a future mortgage and home purchase. For more information on renting in Seattle, contact your local real estate agent today.