Can Rent Be Reported to a Credit Agency?

For most renters, rent can only damage a credit rating, but there is a push in the credit reporting industry in 2011 to report a consumer's entire rental history. If the credit reporting bureaus included rental history in credit reports, consumers could qualify for billions of dollars more in mortgage and credit card accounts, according to Charles White of Corporate Credit Builders. Consumers can pay agencies to report rental history, but it may not help them acquire a loan.

Identification

The national credit bureaus have almost no rental history on consumers because landlords rarely have the resources to report rental history to the bureaus or the minimum number of accounts to join a national reporting service. Rent payments that appear on a credit report usually come in the form of a collections account or civil judgment. Thus, rent reported to a credit report typically lowers a credit rating.

Experian

In 2011, Experian -- one of the major credit reporting bureaus in the U.S. -- became the first major bureau to incorporate rental history into consumer credit reports when it acquired RentBureau, one of the largest collectors rental payment data in the U.S. In 2011, Experian reported on-time payments only, and it added missed payments starting in 2012. This may motivate the other bureaus to start reporting rental data in the future. For example, the Fair Isaac Corporation, designer of the most common credit scoring model, has a credit scoring system that includes rental history from tenant-screening companies.

Alternaive Agencies

Consumers can report rental payments to alternative credit agencies, but unlike with the consumer credit bureaus, an alternative agency requires a monthly service charge to verify payment data. Under the Equal Credit Opportunity Act, lenders must at least consider an alternative credit history report. However, lenders often ignore alternative payment data and those that look at alternatives may scores may restrict their use. For example, applicants for a Federal Housing Administration loan cannot use nontraditional payment data to supplement a poor credit history with the major bureaus, according to Kenneth R. Harney of The Los Angeles Times.

Tip

While you can report rental history to some agencies, starting a history with the major bureaus opens up more credit opportunities. If you have no traditional credit history, you can probably still get a low-level credit card, such as a secured card. Secured accounts require a deposit in a savings account, but having an on-time payment history and keeping a low balance may prove to the lender that you can handle a traditional, unsecured credit card. Department store and gas station credit cards also have few approval standards.