Rent Builds Credit

Hey Paul…Is it possible to have your monthly residential rent payments reported to the credit bureaus?  If it is possible, does it help increase your credit score and how do you get this accomplished?  

Thank you,
Cathy

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Hello Cathy,

Yes, there is a credit bureau called Pay Rent, Build Credit, Inc (PRBC.com) that can track your rental history and will even produce a credit score called a Bill Payment Score (BPS).  The company was founded in 2002 and since its services are cost free, I would highly recommend the use of such a service.  In the mortgage industry, rent verifications may be added to a tri-merged credit report through what is called a ‘credit supplement’.  A credit supplement can successfully include rent as a trade line on the report, but it does not impact the FICO score.  The PRBC report is superior to a credit supplement, in that it actually generates a BPS score.  There are an estimated 50 million consumers with a monthly housing payment (i.e. rent) that doesn’t report to the credit bureau, so we’ll have to watch how things develop for PRBC.  At present, I doubt if any mortgage lenders rely solely on the BPS score for underwriting purposes.

Keep in mind that the best way to document your rental history to a prospective mortgage underwriter is to present twelve months of cancelled checks from your personal bank account, which means avoid paying with cash or a money order. A further caveat – don’t let the landlord throw a wrench into your future homeownership plans by suggesting you forgo making a rent payment (or portion thereof) in lieu of trade for fixing a broken sink.  Insist he get his own wrench and fix the sink himself.  As for you, you’ll be making your full rent payment on time with a personal check.

Paul