Rent payment reporting is a valuable tool for tenants looking to build credit and for landlords to attract and retain loyal renters. But is rent reporting worth it for both parties? Here’s what tenants and landlords should know about rent reporting.
What Is Rent Reporting?
Rent reporting reports tenants on-time rent payments to major credit bureaus, such as TransUnion®, Experian®, and Equifax®. Some landlords can offer rent reporting services to renters. But, if a landlord does not utilize rent reporting services, a tenant can still report rent by signing up for a rent reporting service themselves.
How to Report Your Rent to Credit Bureaus
As a tenant, you can request that your landlord report your monthly on-time rent payments if they provide this service. However, if that’s not the case, you can turn to a rent reporting service, such as Resident-Link, to submit rent payments to major credit bureaus.
Reporting your monthly on-time rent payments can improve your credit score, help you qualify for loans and at lower rates and show lenders that you can make on-time payments towards a loan.
How to Choose a Rent Reporting Service
Using a rent reporting service can help build your credit history and improve your credit scores. But how do you find a rent reporting service?
Here are a few things you should remember when choosing a rent reporting service, as the landlord or the tenant.
Cost is a big deal when choosing a rent reporting service. You need the service you select to be affordable and fit your budget.
Find out what services the rental reporting service offers.
You also need to consider the quality of service from the company. You need to be sure they’re providing quality, reliable, on-time service. The team should be helpful and knowledgeable about your rights and the process.
As a landlord, all these same qualifications apply to you. Be sure you’re choosing a simple-to-use service that’s affordable.
Why Residents Should Consider Reporting Rent Payments to Credit Bureaus
Look at your existing credit history. Do you have a lot of credit cards or other loans that show that you make payments on time? It’s hard to get credit if you don’t have proof that you can make payments on time. Yet, if you are making on-time rent payments, that’s one of the best ways to prove to creditors you know how to balance your finances.
There are many other reasons to consider reporting your on-time rent payments to credit bureaus as well. Take a look at some of the most important to you as a renter.
Establish a payment history
With the help of a rent reporting service, you can prove to other lenders down the road that you can afford to make payments this large on time every month. If you want to buy a car or a home, establishing a strong payment history can benefit you.
Show you deserve lower interest rates
Demonstrating that you can make on-time payments helps with building credit, but it also shows lenders you’re less of a risk to them. That means that they can offer you a lower interest rate on credit cards and loans over time.
Better manage your expenses
When you know that you are reporting your on-time rent payments to credit bureaus, you’re going to value making those on time payments more. You also can have better insight into your expenses and make wiser decisions about spending money.
Help prevent identity theft
Some rent reporting services, like Resident-Link, include identity theft protection in their plans. Identity theft protection can be helpful when protecting your credit, especially with the work you’re putting in to build it up. An identity thief can cause serious financial damage, including negatively impacting your credit scores. Identity theft protection services can help save you other financial damages caused by identity theft.
When Should You Report Rent to Credit Bureaus?
If you are a tenant making on-time rent payments and find out your landlord does report rent to major credit bureaus, you should jump on this opportunity immediately. Again, reporting rent payments over time can benefit your credit.
If your landlord doesn’t report rent, you can start reporting your rent with a rent reporting service of your choice that fits your needs.
As a property manager or landlord, there’s no bad time to use a rental reporting service. However, it’s best to do so right from the start of the lease for the best results.
Rent Reporting Benefits Both Landlords and Tenants
Rent reporting is a positive for renters as well as landlords for these key reasons.
Keep track of payments
It’s always good when tenants pay their rent on time as the landlord. With rent reporting, landlords can track rent payments and maintain a better cash flow.
Rent tracking helps landlords attract a higher quality tenant
From a landlord’s perspective, rent reporting helps them attract and retain more responsible tenants.
Tenants benefit from being a standout renter
As a tenant, another benefit of rent reporting is that it helps you stand out among renters. In many areas, the best properties are leased quickly, which often means mor than one applicant applying for the property. If you want to make sure you get a chance to get the property you want, you need to demonstrate good financial management and a consistent payment history. With on-time rent payments documented with credit bureaus, you can do that.
Rent reporting is a win-win opportunity for landlords and tenants. If you’re a tenant looking to build and establish credit with your on-time payments, this can benefit you. For landlords, rent reporting assists in retaining and attracting better tenants while helping to maintain a steady cash flow.
Only you can decide whether it’s worth it for you as the tenant or landlord. The good news is rent reporting services are available whenever you decide.