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A new way to build your credit history

A new way to build your credit history

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Did you know that paying rent can impact your credit history? Until 2010, even if you dutifully paid your rent on time each month, it had no effect on your financial future. That changed when Experian, one of the three major credit bureaus, acquired a credit reporting agency called RentBureau.

The merger allows rent payment data to be directly uploaded by property managers and reported out on Experian credit reports.

So ask your landlord to help a brother (or sister) out by reporting your on-time payments. It could potentially help you get lower interest rates on loans and increase your credit limit.

How it works

According to Experian RentBureau, rental payment data is received every 24 hours from property management companies and electronic rent payment services nationwide.

Once the data is received, your positive rent payment history reported to Experian RentBureau can be seen on your Experian credit report. These reports are used by banks, financing companies, and more to determine your eligibility for loans and opening credit accounts.

As a prospective tenant, this also improves your chances of getting into that place you’ve had your eye on because landlords and apartment community managers see your positive rent history during the screening process.

Making sure your rent is reported

If your landlord isn’t already reporting your rent payments, ask them about using an online payment system that makes it easy. Rentler Payments is collaborating with Experian RentBureau to allow residents to opt-in when they sign up for the service.

That way, every time you pay rent using Rentler Payments you’re building your credit history.

Plus, Rentler Payments allows you to pay rent online using a credit or debit card (or bitcoin, if you’re on the cutting edge of payments).

Financial experts suggest using a credit card to pay rent and then paying that card off in full each month with the cash you would have given to your landlord. That way you build credit history with an on-time rent payment and reap the credit-boosting rewards that come with a fully paid off credit card.

As you pay rent on time, you are setting yourself up for a better rate on a mortgage if you decide to stop renting and buy a house in the future. According to financial advisor Dave Ramsey, the more evidence you can provide of your history of on-time payments, the greater your chances of qualifying for your mortgage.

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