Rent: It’s one of the first items on your monthly budget, and paying rent is such an ingrained habit that you barely even have to think about it. If you’re not in the habit of paying rent online, though, you might consider starting. Why? Because paying your rent online can raise your credit score!

In 2017, TransUnion studied 12,000 renters who reported their rent payments to credit bureaus over the course of a year. The study found that renters’ scores rose an average of 16 points within six months, and the benefit was greatest for those who started with a credit score below 620.

When you pay rent online, your payments are reported, it shows credit bureaus what they are looking for, and it can combine with credit card payments to increase your score even more. Here’s how it works.

Your Payments Are Reported

Why does it have to be online? Well, “Simply paying your rent will not help you build credit,” says Bev O’Shea at NerdWallet. “But reporting your rent payments can help you build credit—especially if you are new to credit or do not have a lot of experience using it.”

At West Fifth Apartments, we have an online rental payment system that reports information to the credit bureaus. When they receive a record of your on-time rental payments, your credit score improves.

Shows Credit Bureaus What They Are Looking For

What elements do credit bureaus use to determine credit scores? Here’s one example from Experian:

  • Use of credit cards
  • Payment history
  • Applications for new loans and credit

Paying rent fits under the “payment history” category. When you pay rent online, those payments become part of your payment history. As you pay on time and in full and continue to do so, that reflects in your credit score, too. 

Combines with Credit Card Payments for Higher Score Gains

You probably already knew that paying off your credit card can boost your credit score, so here’s an idea to try: Get a credit card specifically for paying your rent!

“Open a credit card and use it to pay your rent . . . then pay your credit card balance in full each month,” says LaToya Irby, credit expert for The Balance. “The timely credit card payments will help boost your credit score.”

Paying rent online is easy through our resident portal. When you pay through the portal, your payments are reported to credit bureaus, showing them exactly what they are looking for. And if you choose to pay with a credit card, you may increase your score even more. Let us know if you have any questions!