How to Boost Your Credit Score While Living in a Rented Apartment

One of the unpleasant truths about personal finance is that the rich get richer every time they borrow money and every time they make an installment payment toward repaying it, while the rest of us diligently pay our bills every month, usually exhausting our entire paycheck in the process, while our credit score barely inches upward.  In a perfect world, paying your rent every month would boost your credit score just as much as making payments on a home mortgage loan does, but the credit reporting bureaus do not see it that way.  The fact that rent payments usually do not count toward your credit score contributes to the “once a tenant, always a tenant” phenomenon.  In order to qualify for a home mortgage, you must use your credit cards judiciously and keep up with your car loan payments, which is feasible, but then how do you save the money for a down payment?  In a world starved for good news about personal finance, rent reporting services offer a glimmer of hope by making it slightly easier for renters to improve their credit scores, so they can qualify for more desirable loan terms, and perhaps eventually for home mortgages.  To find out more about improving your credit score while paying a painfully large portion of your paycheck toward rent, contact a Plantation credit repair lawyer.

Rent Reporting Services Can Help Tenants Raise Their Credit Scores

The three major credit reporting bureaus, namely Equifax, Experian, and TransUnion, collect data on consumers’ payments toward certain financial obligations, as well as their borrowing behavior.  They find out every time you make or miss a credit card payment, for example, as well as every time you apply to open a new credit card account.  It is one of life’s many injustices that home mortgage payments are part of your credit report but rent payments are not.  Therefore, the homeowner who pays $2,000 toward a mortgage every month gets a major credit score boost over the course of a few years, while the tenant who pays the same amount toward rent gets nothing.

Rent reporting services such as Zillow Rental Manager, ClearNow, Esusu, and PayYourRent automatically report tenants’ rent payments to credit reporting bureaus, but it is the landlords who must subscribe to them, not the tenants.  Services that work directly with tenants include Pinata and Rental Kharma.  Rent reporting services will not deposit bundles of money into your bank account; they will not even make your rent less expensive.  They will, however, help you raise your credit score more quickly, so that you can get better interest rates on car loans and personal loans and so that you can avoid risky financial products like payday loans and earned wage access (EWA) advances.

Work With a Debt Lawyer About Boosting Your Credit Score While Renting

A South Florida debt lawyer can help you if you are a tenant and are trying to raise your credit score so that you can qualify for a home mortgage.  Contact Nowack & Olson, PLLC in Plantation, Florida to discuss your case.

Source:

cnbc.com/2024/01/20/how-to-use-rent-reporting-services-to-build-improve-credit.html